Wider DB pension fund inquiry due this year
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The Work and Pensions Committee is still planning to conduct a wider inquiry into defined benefit pension schemes this year, after looking at the use of liability-driven investments in 2022.
Last October, when MPs launched the LDI inquiry, the committee said it intends to follow this up “with a further inquiry in the new year looking at DB schemes more widely”.
It said issues are likely to include DB scheme funding requirements and arrangements to protect pension benefits when a scheme is wound up.
This inquiry is still due to go ahead; in a letter to pensions minister Laura Trott from December, committee chair Sir Stephen Timms wrote: “[We] intend to look at wider issues affecting DB schemes next year."
However, mallowstreet understands that timings have not been decided yet.
The focus on DB schemes is likely to include an appearance before MPs by representatives of the Pensions Regulator.
A spokesperson for the regulator said TPR is aware of the committee’s plans to look at wider issues affecting DB schemes, adding: “We look forward to supplying any information we can to inform and assist its work. If requested we will of course be happy to give evidence in person.”
DB funding requirements are in the process of being updated, through new regulations and the incoming DB Funding Code of Practice. However, the planned requirements – which include using duration to measure maturity, and an expectation that schemes derisk faster – have been put into question by the October crisis.
David Fairs, TPR’s director of regulatory policy, analysis and advice, who has been heavily involved in developing the code, is departing in March, but TPR has said the code will not be delayed by Fairs’ departure.
Meanwhile, the regulator also gets a new chief executive at the end of March, Nausicaa Delfas, who takes over from Charles Counsell.
Is an inquiry into DB funding and wind-ups justified in your view?
