Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Defined benefit definition

What does Defined benefit mean? In legal practice, defined benefit (DB) refers to occupational pension benefits fixed by a formula—commonly based on pensionable salary (final salary or career average) and length of service—rather than by the amount of contributions paid or investment performance. The term is used and recognised in UK pensions legislation (including the Pensions Acts and related regulations) and in Ireland (Pensions Act 1990), with broadly consistent usage across England & Wales, Scotland, Northern Ireland and Ireland. Key features include: the sponsoring employer bears the funding and investment risk; trustees obtain regular actuarial valuations; and any deficit must be addressed through...

Negotiating Defined Benefit Scheme Funding and Valuations: TPR 2024 Code, Fast Track and Bespoke, Funding and Investment Strategy, Covenant, Recovery Plans, Assumptions, Timescales and Post‑Valuation Events

Published by a LexisNexis Pensions expert

Practice notes

THIS PRACTICE NOTE APPLIES TO Defined benefit OCCUPATIONAL PENSION SCHEMES

Purpose of scheme funding negotiations

Funding discussions typically take place between the Employers that sponsor pension schemes and the trustees who run them. Trustees and sponsoring employers are generally required to agree the following funding matters:

the valuation of a defined benefit (DB) scheme’s assets and liabilities on a scheme‑specific basis (or, more precisely, the methods and assumptions used to determine the scheme’s ‘technical provisions’)
the statement of funding principles, being a written explanation of the trustees’ policy for achieving the statutory funding objective
if the valuation shows the statutory funding objective was not met at the effective date (that is, the scheme’s assets are less than its liabilities on a scheme‑specific funding basis), the recovery plan
the schedule of contributions, which broadly sets out the contributions the employer will be required to pay to the scheme in the future
for scheme valuations with an effective date on or after 22 September 2024, the scheme’s funding and investment strategy...

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Alison Fleming

PWC

Alison Fleming is Head of Pensions at PwC in Scotland. She has a wealth of experience advising employers and trustees on a wide range of pensions-related issues....

Web page updated on 21/05/2026

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