The Pensions Regulator (TPR) has published an interim response to its consultation on the defined benefit (DB) statement of strategy, confirming that it has reduced the data ask of schemes in certain situations following industry feedback.

Replacing the existing DB Funding Code, introduced in 2014, DB scheme triennial valuations with effective dates from 22 September are required to be carried out under the new DB Funding Code, which is expected to come into force in late November.

To comply with the new requirements, schemes must also submit a statement of strategy.

Given this, TPR has today (23 September) published a number of supporting documents to assist trustees with meeting their obligations.

In particular, TPR shared an interim response to its consultation on the statement of strategy, in order to give trustees and employers the information they need as early as possible, with a fuller response expected in the winter.

TPR's interim response confirmed that it had made a number of changes following industry feedback, as many respondents raised the issue of proportionality of the information requested, and some suggested information beyond the legal requirements was requested.

According to TPR, respondents also considered there to be a lack of flexibility in capturing schemes’ long- term objectives and other information addressing the schemes’ particular circumstances.

As a result of this, TPR revised the templates to remove much of the narrative explaining the legal requirements, as well as adjusting the templates to accommodate open schemes and for schemes such as GMP underpin schemes and cash balance schemes.

TPR also outlined its definition of small schemes, suggesting that this updated definition expected should mean that around 50 per cent of schemes will be eligible for the small scheme easements regarding the information to be provided in the statement of strategy.

In addition to this, the regulator removed the requirement to submit detailed covenant information for certain schemes, and removed the requirement to submit cashflow information for all fast track schemes, as well as for small schemes whether they follow a bespoke or fast track approach

The legislation requires trustees and scheme managers to submit their statement of strategy to TPR 'as soon as reasonably practicable' after preparing their funding and investment strategy.

However, TPR confirmed that it is not expecting to launch the new digital service enabling DB trustees to submit a scheme valuation in spring 2025.

As a result, it said that whilst it does not expect trustees to delay the completion of their valuation, it does not expect valuation information, including the statement of strategy, to be submitted until its new digital platform for receiving valuations and related materials is up and running in the spring.

Alongside its interim response, the regulator shared four statement of strategy illustrative templates, covering: Fast track before the relevant date. fast track on or after the relevant date, bespoke before the relevant date, and bespoke on or after the relevant date.

TPR executive director of market oversight, Neil Bull, highlighted this as a "milestone moment for DB trustees", as after years of development, schemes with relevant valuation dates should now be referring to the new funding code, with the rest to follow on in the next two years.

He continued: “We have engaged extensively with industry in the development on our new DB funding code.

"Our expectations are now clear, and I hope trustees find the funding code guidance helpful as they navigate their way through either their first fast track or bespoke valuation.

“We’ve listened to feedback and reduced the data ask of schemes in certain situations such as for well-funded and small schemes.

"Now, ahead of the launch of a new digital submission platform in the spring, we’re giving schemes information to help them prepare in advance.”

The latest update has been also broadly welcomed by industry experts, as LCP partner and DB funding group head, Richard Soldan, said that it is “helpful” that TPR have listened to the general mood of the industry, reducing the level of information many schemes will need to provide.

“I’m pleased they have also recognised the position of open schemes more explicitly,” he continued.

“Trustees will need to consider at an early stage the full list of data that they will need to submit, particularly if they expect to take a “bespoke” approach, to make sure they cover all the requirements efficiently as they go through the valuation process.

“And while we have the detail about the data schemes will need to submit, we won’t know exactly how it will need to be provided until spring next year when TPR’s new digital system is up and running. It’s really important that TPR ensures the new system is easy to use, to ease the burden on schemes.”

This was echoed by Barnett Waddingham principal and senior consulting actuary, Mark Tinsley, who said that while TPR perhaps could have gone further, it has introduced “several sensible easements” that will reduce the burden of producing the statement for many schemes.

However, he said that the statement is still set to be a "sizeable document that will require significant input from schemes".

“It is therefore essential for the regulator’s promised new digital service to deliver a streamlined approach to submitting the valuation results,” he continued.

“Today’s response also confirms that schemes that go down the bespoke submission route will need to provide significantly more information to the regulator than schemes that are able to do a fast-track submission," he pointed out.

“As such, stakeholders of smaller schemes (in particular) may wish to ask their advisers whether their scheme likely meets the fast-track parameters, as it may be possible to take proactive action now to avoid the additional work and expense associated with Bespoke.”

Hymans Robertson head of DB scheme actuary services, Laura McLaren, also stressed that, despite the improvements, completing the templates will still incur extra work as schemes need to set out plans and evidence in the format required.

“Example guides run to around 17 pages for fast track and 28 pages for bespoke,” she continued. “Trustees and sponsors will need to factor this into upcoming valuation plans but at least now they have the certainty to meaningfully start to prepare.”

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