DB schemes - funding Flashcards
What are the trustees’ main role?
Ensuring there is enough money in the scheme to pay members as and when due.
How long are new trustees given to get up to speed with pension & trust law?
6 months
What proportion of trustees must be nominated by scheme members?
1/3
What is the scheme actuary’s main role?
To advise the trustees of the scheme’s funding position
What is the scheme auditor’s main role?
To prepare accounts for the scheme and auditor’s statement confirming contributions have been paid as per schedule of contributions.
What is a bridging DB scheme?
One which increases the member’s pension from their scheme retirement age to state pension age before the bridge falls away.
What type of public sector scheme allows transfers to other schemes?
Fully funded schemes - i.e. local government
Who is responsible for meeting the statutory funding objective?
The employer
If a valuation shows a scheme isn’t meeting its statutory funding objective, how long do the trustees have to prepare a recovery plan and submit all details to TPR?
12 weeks to prepare recovery plan
15 months to submit all details to TPR
What period of delay in the employer contributing must be reported to TPR by the trustees?
More than 30 days
What is a section 179 valuation?
Estimate of the funding required to secure PPF compensation levels
What is the main potential advantage of paying into an in-house AVC?
Fund may be able to be used solely for PCLS.
DB income: £12,000
Commutation factor: 12
What is the max PCLS that could be commuted from the scheme pension?
(12000x12)/(1+[0.15x12])=£51,428.57
How long must the consultation process last for employees affected by significant changes to the scheme?
60 days minimum
