Further updates on the pension benefit review, and new Funding and Investment Regulations

New funding and investment regulations due in 2023

Last year, the Department for Work and Pensions (DWP) consulted on the new Funding and Investment Regulations.

Following this, the Pensions Regulator is now consulting on the code of practice it will use to put these regulations into practice. The consultation closes on 24 March 2023. The NHF will be submitting a response to the consultation on behalf of the sector. To help shape our response and share your views, please get in touch.

We currently expect the regulations to come into force for valuations with effective dates from 1 October 2023 onwards. This means that the next SHPS valuation on 30 September 2023 will be carried out under the existing regulations and code of practice, and not under the new code.

The draft regulations are consistent with the general message that Defined Benefit pension schemes should have a plan to reach full-funding on a low risk basis, with the pace of achieving this depending on the maturity of the scheme. This could have consequences for employers if no mitigation is able to be put in place.

Isio has supported the NHF in responding to the government's consultation on the new Funding and Investment Regulations, and the response to the Pensions Regulator’s consultation will reflect these points, but with focus on specific details set out in the draft code of practice.

Isio recently hosted a discussion with the Pensions Regulator and the Regulator of Social Housing to discuss the new code, and the funding of Trust based Defined Benefit schemes by the housing sector more widely.

TPT benefit review

All employers have now had a chance to comment on the draft court papers released by TPT Retirement Solutions for the ongoing benefit review. This includes all employers with scheme participations in TPT and is not limited to Social Housing Pension Schemes (SHPS) and housing associations’ own schemes.

Given the matters under review are common to all employers using TPT, there may be benefits in working as a group. Isio and Devonshires are acting together to offer joint support to employers, and NHF members are free to join this group going forwards, or to purchase the first stage governance report:

Stage one support – “what do we need to be aware of?” A governance report suitable for Boards to qualify and quantify risks and possible outcomes, and includes impact on funding, accounting and timescales.

Stage two support – “how might we take action?” You may decide after stage one to take no further immediate action but to monitor on your risk register, or you may decide to potentially join the employer group for further action.

Get in touch if you would like to find out more.

Isio is one of the country’s leading independent pensions advisory firms, known and respected for its agility and the team has more than 1,000 client relationships. We're working with our pensions advisers Isio to keep the sector up to date on key areas affecting housing associations.