The CBI has responded to The Pensions Regulator’s consultation on changes to the defined benefit (DB) funding framework. The framework provides practical guidance to trustees and employers of DB schemes - a workplace pension based on an employee’s salary and length of time worked - on how to comply with the scheme funding requirements. The consultation focuses on draft principles and options for the new code, with a second consultation on the draft text for the code expected next year. The changes will apply to all businesses with DB schemes.
At the heart of the regulator’s proposals is a new “twin-track” approach for demonstrating compliance with funding requirements. It involves a fast track route which would allow schemes to adopt set rules and methodologies set out by the regulator, and a bespoke route which would allow for more flexibility. But the latter requires trustees to explain and evidence why their approach