The Pensions Regulator (TPR) has launched a consultation on proposals to help trustees of defined benefit (DB) pension schemes meet new requirements for submitting a statement of strategy.

TPR previously announced plans to consult on the statement of strategy at the PLSA Investment Conference, confirming that the final DB Funding Code is set to follow "this summer", before the new DB funding regulations coming into force from 22 September.

The new DB regulations, which were published in January, introduce new requirements for trustees of DB schemes to set a long-term funding and investment strategy for their scheme.

As part of this, DB trustees will also be required to complete a statement of strategy alongside their actuarial valuation, that sets out this long-term funding strategy and their approach to managing associated risks.

The new statement of strategy that trustees is made up of two parts: part 1, which records the funding and investment strategy; part 2, which records various supplementary matters, including how well the funding and investment strategy is being implemented, the main risks to the strategy and how they are being managed.

TPR said that this should be a useful tool to support trustees in their long-term planning and risk management, and facilitate engagement between trustees, employers and TPR.

In response to recent industry feedback, however, TPR has created statement of strategy templates to minimise the administrative burden on trustees, which it is now seeking industry views on.

This includes separate templates to reflect that schemes will have to provide slightly different information depending on whether they have reached the ‘relevant date’, or whether they are taking a fast track or bespoke approach.

TPR also confirmed that it will request less information from smaller schemes, acknowledging that the potential burden, and additional costs of compliance, will often be significantly larger for smaller schemes when considered as a percentage of scheme liabilities or assets.

In the consultation, the regulator is looking to understand whether the proposed approach raises any challenges or unintended consequences, whether the proposed statement of strategy template is clear and fit-for-purpose, and whether there are any issues with trustees providing the supplementary information proposed.

TPR interim director of regulatory policy, analysis and advice, Lou Davey, said: “Receiving statements of strategy will give us additional data to better understand journeys that schemes are on as they mature, improving our regulatory oversight.

"Our proposals are designed to make it as easy as possible for trustees to comply with new legislation, and ultimately to show how they are acting in the best interest of savers.

“We want a broad range of views to ensure our proposals are understood and accepted by trustees and advisers.

“In particular we want to know if people think we are being clear on what data we’re asking trustees to provide, whether this data is readily available, or what challenges there could be in sourcing it.”

TPR's fast track parameters, as well as an updated impact assessment, are also set to be published at the same time as TPR's final DB Code.


Barnett Waddingham principal and senior consulting actuary, Mark Tinsley, highlighted the latest consultation as a "key piece of the new Funding Code puzzle", adding that "it is pleasing that momentum is being maintained as the September ‘go live’ date draws nearer".

“After being criticised in the wake of the 2022 gilts crisis, it appears as if the regulator plans to use the change in funding regime to significantly increase the amount of data it collects from schemes at each valuation. While understandable, there is a danger that this drive to become a more data led organisation could result in significant extra costs for schemes," he continued.

“Thankfully, it seems as if TPR is being mindful of this in the main, with a less burdensome approach proposed for well-funded and small schemes. However, there are still instances where the amount of work does not appear justifiable and further reflection from TPR is required.”

This was echoed by Hymans Robertson head of DB actuarial consulting, Laura McLaren, who warned that while the proposed template sets clear expectations for the information a scheme must provide, this looks like a significant addition to valuations.

"The challenge will be to streamline compliance so it’s as easy as possible," she continued.

“The newly inserted clause in the regulations offered some hope TPR would use more discretion in how much information schemes need to provide. But it hasn’t cut requirements in many places.

"A scheme’s route to compliance will have the biggest effect on how much detail it provides. The example ‘bespoke’ statement runs to over 20 pages, which underscores the appeal that fast track could have.

“All schemes face a lot of work to set out strategy in the format required. This is the first time trustees are required to include covenant information with a valuation.

"They’ll also need to say how the scheme is to provide benefits in the long term (buyout, run-off or alternatives), and summarise the approach to de-risking between now and the end of the journey plan.

“It’s not clear how much value the extra disclosure requirements add in a funding landscape that’s changed since the process for these changes began.

“Schemes with the earliest in-scope valuations (later this year) will have their work cut out. They need TPR to quickly publish the final funding code, Fast Track parameters and other guidance.”

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