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TPR employer covenant guidance for DB funding code; BoE LDI resilience; PPF Purple Book; scheme return and dashboards updates; PLSA backs Mansion House, biodiversity guide; Ombudsman orders pension liberation repayments

Published on: 05 December 2024

Published by a LexisNexis Pensions expert
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Funding and investment

TPR publishes revised employer covenant guidance to align with new DB funding code of practice

The Pensions Regulator (TPR) has at last issued revised guidance on the employer covenant for trustees overseeing defined benefit (DB) pension schemes, to align with its new DB funding code of practice, which took effect on 12 November 2024 under the Pensions Act 2004 (Code of Practice) (Defined Benefit Funding) Appointed Day Order 2024 (SI 2024/1143). Described by TPR as ‘the last piece of the jigsaw to help schemes carry out valuations under the new DB funding code’, the update introduces the first regulatory definition of employer covenant, intended to deliver greater market certainty and foster consistency between schemes. Notable changes cover cash flow analysis, tests of reasonable affordability, maximum affordable contributions, reliability periods, covenant longevity, and contingent assets. The guidance also stresses proportionality when assessing covenant strength and provides worked examples to illustrate challenging areas...

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