PART IVSCHEME FUNDING

Scheme funding

The statutory funding objective201

1

Every scheme is subject to a requirement ( “the statutory funding objective”) that it must have sufficient and appropriate assets to cover its technical provisions.

2

A scheme's “technical provisions” means the amount required, on an actuarial calculation, to make provision for the scheme's liabilities.

3

For the purposes of this Part—

a

the assets to be taken into account and their value shall be determined, calculated and verified in a prescribed manner, and

b

the liabilities to be taken into account shall be determined in a prescribed manner and the scheme's technical provisions shall be calculated in accordance with any prescribed methods and assumptions.

4

Regulations may—

a

provide for alternative prescribed methods and assumptions,

b

provide that it is for the trustees or managers to determine which methods and assumptions are to be used in calculating a scheme's technical provisions, and

c

require the trustees or managers, in making their determination, to take into account prescribed matters and follow prescribed principles.

5

Any provision of the scheme rules that limits the amount of the scheme's liabilities by reference to the value of its assets shall be disregarded.