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DWP move to replace MFR on DB schemes

The Department for Work & Pensions has issued new proposals to replace the minimum funding requirement for defined-benefit pension schemes.

Pensions minister Malcolm Wicks says plans include a new statement of funding principles plus requirements for recovery plans to restore funding shortfalls and trustees to keep members informed about funding of their schemes.

The Pensions Regulator’s draft code of practice on funding DB schemes has also been published. The code sets out 12 standards of conduct and practice expected of trustees.

The Pensions Regulator will replace Opra on April 6, with a remit to protect members’ benefits, reduce the risk of calls on the Pensions Protection Fund and improve understanding and admin of work-based pensions.

Wicks says: “Everyone is agreed that the old MFR reg-ime needed improving and I believe these proposals will be positive for both trustees and scheme members.”

Pensions Regulator chairman David Norgrove says: “The code gives clear guidance for trustees of DB schemes on their responsibilities in relation to funding. Trustees will be better equipped to challenge adv-ice from their scheme actuary and to ensure that an appropriate recovery plan is in place to meet any funding shortfall.”

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