| DWP delays new scheme-funding requirements by a month |
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LONDON - The UK’s Department for Work and Pensions has announced that the new funding requirements for the pensions scheme would come into effect only from October 31.
The regulations for the defined benefit occupational pension schemes were slated to come into effect from September 23 in order to comply with the European pension fund directive. “The slight delay in publishing the regulations arises from the need to take account of the many issues raised by the pensions industry as a result of the extensive consultation the department undertook on draft regulations earlier this year,” the DWP said in a statement.
The DWP said that the regulations would apply to any transaction that takes place after October 31. The DWP added that it was aware that the pensions industry was impatiently waiting to know the nature of the final legislation and said that the original draft should take into account all the pertinent concerns that have been raised by various sectors of the industry. “The delay will have minimal practical effect, since it comes at the beginning of what is usually a lengthy process of conducting an actuarial valuation of a scheme's assets and liabilities, taking up to 15 months in total,” the statement concluded. The new regulations make it compulsory for the trustees to seek advise before embarking on any investment plans and also have a recovery plan in place if any funding shortfall is discovered as a result of these decisions.
Commenting on the decision to delay the implementation of the new schemes, pensions minister Stephen Timms said, "The new scheme funding requirements will replace the MFR and will allow the trustees of each scheme to develop an appropriate funding strategy which takes account of the specific factors and circumstances of their scheme.” The regulations would be tabled before the Parliament in early October.
Posted
on : Sun, 04 Sep 2005 07:05 GMT | Pensions News
By : Mark Richardson
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