The Pensions Regulator (TPR) has been consulting on its new DB funding code for some time. The industry expects to see the final regime later this year, including how TPR will take account of feedback and reflect changes to the DB pensions landscape, including funding improvements and sentiment on issues such as open schemes and systemic risks. The code is due to come into force on 1 April 2024.

This code outlines how pension schemes should de-risk and allocate investments towards low-dependency funding. It emphasises the importance of employer covenant, which impacts investment strategy and compliance with the code.

We’ve put together eight examples to show what the code could mean for various schemes, and some of the unintended consequences that could arise. We suggest changes we’d like to see in some areas, especially where these would keep compliance proportionate to risks.

Download our case study, to see the eight scenarios we have put together.