DB code and strategy

1. DB code and strategy Fiona Frobisher

2. Outline • DB strategy documents • Key messages of the code and regulatory approach • Issues raised in consultation • What happens next? • Key messages for tranche 9 schemes

3. Current market New objective on Reflect 8 years of conditions - T9 sustainable growth regulation Annual funding Draft c ode of DB regulatory statement practice on strategy 2014 scheme funding DB funding Scheme Essential guide regulatory and funding to the code enforcement analysis T7/T9 policy Business engagement assessment Consultation response DB documents published on 10 June

4. Strong, ongoing employers Best support for well - governed scheme Appropriate funding strategies Approach to the funding code Employers Successful business plans, support scheme Trustees Pay benefits as they fall due

5. 9 key funding principles

6. The regulator’s approach to regulating DB schemes

7. Key issues raised in consultation Scale Risk indicators & FRI (BFO) Covenant long term De-risking Small schemes Sustainable growth plans

8. Transitional arrangements and next steps • Transitional arrangements • Code expected to be made in Britain in July and in NI later on in the year. • Trustees and employers of all schemes should apply the code as far as is reasonable depending on where they are in the valuation cycle. • Be mindful of the key messages put out in the last few years. • We will take a pragmatic approach to looking at valuations. • Next steps Education Evaluation Implementation

9. Key messages for T9 schemes • Annual Funding Statement • Draws on Code and Funding Policy • Trustees should form their own views on covenant • Funding risk is one of a suite of risk indicators • The same standards apply to all schemes irrespective of size • T9 valuations - challenging but manageable for most

10. Further information • Consultation response, code, strategy, policy and BEA • Annual Funding Statement 2014 and supporting analysis http://www.thepensionsregulator.gov.uk/docs/db-annual-funding-statement-2014.pdf

11. Questions?

12. Responses to the consultation • 85 respondents • A wide spectrum of stakeholders • Broadly supportive • Many detailed comments

13. Consultation key themes and our response – Code (1)

14. Consultation key themes and our response – Code (2)

15. Consultation key themes and our response – Regulatory approach