TPR publishes interim response to statement of strategy consultation and updated templates

The Pensions Regulator has published their interim response to statement of strategy consultation and updated templates. In this article we look at the response and next steps.

Statement of strategy interim response and updated templates

The revised defined benefit (DB) funding and investment regime applies to valuations with effective dates on or after 22 September 2024. On 23 September 2024, the Pensions Regulator (TPR) announced that it had published statement of strategy (the Statement) documents to assist trustees when producing a valuation under the new framework. Also published was TPR’s interim response to its March 2024 consultation on the Statement which outlines the key topics from the 55 responses received and summarises the main changes TPR has made as a result.

“We’ve listened to feedback and reduced the data ask of schemes in certain situations such as for well-funded and small schemes. Now, ahead of the launch of a new digital submission platform in the spring, we’re giving schemes information to help them prepare in advance.” [Source: TPR press release]

New digital service for submission of the statement

The new regime valuation documents including the Statement will be submitted via a new digital service that TPR expects to be ready by spring 2025. TPR has confirmed that, although the valuation still needs to be completed on time, the valuation documents should not be submitted until the new service is launched – usually, the Statement needs to be sent to TPR as soon as reasonably practicable after the funding and investment strategy has been prepared or revised. This means TPR will not regard late submission as a breach if the delay is due to the digital service not being available.

Valuations with effective dates before 22 September 2024 should continue to be submitted using TPR’s Exchange service.

The template statement

TPR has produced four illustrative Statement templates:

• versions 1 and 2 for Fast Track valuations before or after the relevant date (which must be no later than the end of the scheme year in which the scheme is expected to reach (or did reach) significant maturity); and
• versions 3 and 4 for bespoke valuations before/after the relevant date.

Also available is a data list, an excel spreadsheet, which sets out the requirements for the four different valuation types, the questions asked in the Statement, answer format, applicability, and TPR guidance where appropriate.

The ‘information and data requirements’ of the final digital version of the Statement templates should not differ from the illustrative ones, although the submission process and Statement outputs may change during development of the service.

Next steps

There are still a number of TPR new regime documents that are yet to be published:

• Full response to Statement consultation (expected: winter 2024)
• Regulatory approach document (which will include twin track approach and regulatory filters for assessment) (expected: in due course)
• Updated employer covenant guidance (expected: next few months)
• Guidance on maximum affordable contributions and recovery plan affordability (expected: not known)
• Review of DB funding and investment guidance and potential additional guidance (expected: not known)

Action: Schemes should begin preparing for the new regime in plenty of time to ensure that they will be able to meet the 15 month deadline. Adequate time needs to be built into the timetable to allow for sufficient lead-in time for the new requirements, preparation of the additional documents and information needed and liaison between parties.

Approach: The interim response confirms that trustees should use the legislation and code principles when preparing their valuation and deciding what approach will be suitable. They can then determine whether the approach is bespoke or Fast Track and which template to use.