The Pensions Act 2004 (Code of Practice) (Defined Benefit Funding) Appointed Day Order 2024
November 11, 2024 | 13:30
The Pensions Act 2004 (Code of Practice) (Defined Benefit Funding) Appointed Day Order 2024 has been laid before Parliament and will come into force on 1 April 2025.
The order appoints 1 April 2025 as the appointed day for the purposes of section 24A of the Pensions Act 2004. This means that from that date, the Pensions Regulator will be able to issue a code of practice on defined benefit funding.
The code of practice will set out the Regulator’s expectations of employers with defined benefit pension schemes on how they should fund their schemes. It will also provide guidance on how employers should calculate their scheme’s funding level and how they should make contributions to the scheme.
The code of practice is intended to help employers to ensure that their defined benefit pension schemes are adequately funded and that members’ benefits are secure. It will also help to level the playing field for employers with defined benefit pension schemes, by ensuring that all employers are following the same rules.
The Regulator will consult on the draft code of practice before it is issued. The consultation will give employers an opportunity to provide feedback on the code and to suggest any changes that they think should be made.
The code of practice will be a valuable tool for employers with defined benefit pension schemes. It will help them to understand their obligations and to ensure that their schemes are adequately funded.
Background
The Pensions Act 2004 introduced a number of reforms to the regulation of occupational pension schemes. One of the most significant reforms was the introduction of a new funding regime for defined benefit pension schemes.
Under the new funding regime, employers are required to value their defined benefit pension schemes every three years and to make contributions to the scheme to ensure that it is adequately funded. The Regulator can also issue a contribution notice to an employer if it believes that the scheme is not adequately funded.
The code of practice will provide further guidance on how employers should comply with the new funding regime. It will also help employers to understand the Regulator’s expectations of them.
Impact
The code of practice will have a significant impact on employers with defined benefit pension schemes. It will help them to understand their obligations and to ensure that their schemes are adequately funded. The code will also help to level the playing field for employers with defined benefit pension schemes, by ensuring that all employers are following the same rules.
The Pensions Act 2004 (Code of Practice) (Defined Benefit Funding) Appointed Day Order 2024
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