The Pensions Board has published its long-awaited funding guidelines and has re-introduced submission deadlines for defined benefit schemes.  These guidelines expand on the provisions of the recent Social Welfare and Pensions Act 2012 and in effect ‘switch back on’ the statutory funding régime that has been largely suspended since 2008. 

Key points

The key elements of the new rules are:

• Schemes will normally be allowed until 2023 to clear existing deficits;
     
• A risk reserve with be required with effect from 1 January 2016;
     
• Where schemes hold sovereign annuities or sovereign bonds, they will be allowed credit for these in their funding standard calculations.

The new rules come in the form of prescribed guidance, which is provided for under the Pensions Act, on the following five topics:

• Funding proposals
     
• Section 50 applications (to reduce benefits)
     
• Sovereign annuities / sovereign bonds
     
• Contingent assets
       
• Unsecured undertakings from employers (to commit extra funding in certain circumstances).

To request a copy of Mercer's 'New Funding Rules for Defined Benefit Schemes' where we summarise the main points of the new rules and comment on some of the implications for pension schemes please contact our Marketing Department.

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 REQUEST A COPY OF MERCER'S "NEW FUNDING RULES FOR DEFINED BENEFIT SCHEMES" 

Listen to Mercer experts Sean O'Donovan (Partner) and David O'Sullivan (Principal) discuss the implications for Defined Benefit pension schemes in light of new funding standard guidelines. The session is Chaired by Michael Walsh, Senior Partner and leader of Mercer's Retirement, Risk and Finance business in Ireland.

 LISTEN TO A WEBCAST ABOUT THE NEW FUNDING STANDARD GUIDELINES FOR IRELAND DB PLANS