Trustees have been urged to get up to speed on new regulatory requirements ahead of the revised defined benefit (DB) Funding Code coming into force this weekend (22 September).

Replacing the existing DB Funding Code, introduced in 2014, the new DB Funding Code is set to come into affect from 22 September, with triennial valuations with effective dates from now required to be carried out under the new regime.

However, Cardano director, Chris Heritage, pointed out that the industry is still awaiting the "final key pieces of the regulatory jigsaw puzzle, including the final Statement of Strategy templates and associated data requirements, and the covenant guidance; both of which are vitally important in this new era of detailed documentation".

Despite this, he said that there are steps trustees can start thinking about and discuss with advisers.

In particular, Heritage encouraged trustees to get up to speed on the key points of detail within the new code, and understand their scheme’s situation in the context of the new requirements, giving particular thought as to what elements may require new or additional consideration.

He also stressed the need to be clear on documentation requirements, and encouraged trustees to start making a detailed plan to be ready, working back from the first applicable valuation date.

"We hope that the increased attention the code places on long-term planning, regardless of the valuation track a scheme chooses to take (Fast Track or Bespoke), focuses minds on managing risk over the entirety of the scheme’s journey," he stated.

"This should include proportionate covenant analysis as a crucial input into that risk profile too, as is reflected in the new legal requirement to consider covenant within the Regulations.

"It will help trustees to be clear on the distinction between “box-ticking” and “best practice”, particularly when commissioning external covenant advice."

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