The Pensions Regulator (TPR) has announced that it will launch its second draft DB Funding Code consultation before Christmas so the code can be laid in the summer for its introduction in October 2023.

In a blog, TPR executive director of regulatory policy, analysis and advice, David Fairs, said he was delighted that the regulator would be publishing the 14-week consultation before Christmas, and urged trustees and their advisers to read and respond to it.

“It is not usual for us to consult on a draft code before government regulations have been finalised, but we hope this will be helpful for industry to see how we have interpreted the draft regulations and to see holistically how the different elements of the package (legislation and code) will work together in reality," he wrote.

Alongside the draft code, TPR will also publish a separate consultation on fast track and its twin-track regulatory approach.

Fairs said that fast track was not a legislative tool so was not included in the draft code.

However, it will remain a “key part” of the funding regime, while the bespoke route will be “similar” to the current arrangements for all schemes submitted valuations.

The blog revealed that fast track will act as a "filter" for its assessment of actuarial valuations that are submitted to TPR.

If a valuation submission meets the series of fast-track parameters, the regulator is "unlikely" to scrutinise it further or engage with trustees.

Fairs noted that the need for long-term funding was a key government objective and underpinned the proposed regulations the Department for Work and Pensions (DWP) published in July.

He added that these regulations had given TPR the clarity needed to publish its second consultation on the draft code, which will explain how the regulator will interpret the legislation and help trustees meet the rules set out by government.

TPR’s draft code will be based on the DWP’s draft regulations and it hopes the industry will find it helpful to see how the regulator has interpreted the draft regulations and how the different elements of the package will work together.

Fairs wrote that the regulator has taken on board recent events and the current economic backdrop, and still believed that the direction of travel from the DWP’s regulations and the regulator’s code remained the right one.

“Under the new regulatory framework, we will focus our resources where they can be most effective,” Fairs said.

“We will be able to filter out schemes requiring minimal engagement and intervene when we identify schemes that potentially have too much risk.

“We have spent a lot of time drafting our new DB Funding Code and approach to fast track, and I’m looking forward to the industry’s response as we look to support trustees and protect savers in the decades ahead.”

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