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Pensions Regulator challenges employers to fund pension schemes ahead of shareholder payouts

Pensions Regulator challenges employers

The Pensions Regulator issued its Annual Funding Statement today – setting out its latest expectations for funding of defined benefit (DB) pension schemes, particularly those with actuarial valuations over 2018/19.

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Mike Smedley, Pensions Partner KPMG UK commented: “Given the desire to strengthen DB pensions funding, the Regulator’s robust stance makes perfect sense. It is challenging employers to fund pension schemes ahead of paying shareholders. But it will create challenges for business, and some employers may be surprised by how much the ground is shifting. Many companies will need to give a higher priority to pensions funding and risk management than they do today and some will come under pressure to either increase pension contributions or cut dividends.

“More pension schemes can expect enquiries from the Regulator challenging their current funding plan. Schemes and employers will need to demonstrate a robust and coherent strategy, which we expect to lead to more innovation and use of contingent assets to bridge the gap between employers and the Regulator.”

                                                             ENDS

For more information, contact:
Ed Fotheringham Smith
KPMG UK
07920 572490
Ed.FotheringhamSmith@kpmg.co.uk

About KPMG in the UK

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 16,300 partners and staff. The UK firm recorded a revenue of £2.338 billion in the year ended 30 September 2018. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and has 200,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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