The Chancellor of the Exchequer’s budget speech on 7 March 2001 announced the government’s intention to abolish the Minimum Funding Requirement (MFR).
Opra, the Occupational Pensions Regulatory Authority, has today published guidance on how the MFR regulations will be handled in the period before a new funding test is introduced. This information is available only through the Opra website at www.opra.gov.uk/publications/mfrupdate/. As well as looking at issues arising from the impending abolition of the MFR, the guidance looks at Opra’s experience in this area since the MFR came into force ver four years ago.
The government intends to replace the MFR with a long-term scheme specific funding standard in conjunction with a number of measures to protect scheme members’ interests, such as the introduction of a statutory duty of care on the scheme actuary. The detailed framework for the scheme specific funding standard will take some time to develop. In the intervening period, Opra will continue to regulate schemes on the basis of the current MFR rules.
