Home Business NewsBusiness UK pension schemes could take over a decade to reach full funding under new rules

UK pension schemes could take over a decade to reach full funding under new rules

by LLB Editor
6th Sep 21 11:07 am

XPS’s newly launched DB:UK Funding Watch tracker reveals that scheme deficits against long-term funding targets fell by £40bn over the year to 31 August 2021.

Despite this improvement it will still require 12 years to reach long-term targets under the proposed new rules from The Pensions Regulator (including allowance for the combination of investment returns and current cashcontributions).

However, if current levels of cash contributions are maintained then full funding could be reached in 7 years but the estimated cost to employers will be c. £80bn.

Employers and trustees may also reconsider investment strategies, contingent support and member option exercises as an alternative to cash to mitigate the impact.

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