Pensions Act 1995

56 Minimum funding requirement

(1) Every occupational pension scheme to which this section applies is subject to a requirement (referred to in this Part as “the minimum funding requirement”) that the value of the assets of the scheme is not less than the amount of the liabilities of the scheme.

(2) This section applies to an occupational pension scheme other than—

(a) a money purchase scheme, or

(b) a scheme falling within a prescribed class or description.

(3) For the purposes of this section and sections 57 to 61, the liabilities and assets to be taken into account, and their amount or value, shall be determined, calculated and verified by a prescribed person and in the prescribed manner.

(4) In calculating the value of any liabilities for those purposes, a provision of the scheme which limits the amount of its liabilities by reference to the amount of its assets is to be disregarded.

(5) In sections 57 to 61, in relation to any occupational pension scheme to which this section applies—

(a) the amount of the liabilities referred to in subsection (1) is referred to as “the amount of the scheme liabilities”,

(b) the value of the assets referred to in that subsection is referred to as “the value of the scheme assets”,

(c) an “actuarial valuation” means a written valuation prepared and signed by the actuary of the scheme of the assets and liabilities referred to in subsection (1), and

(d) the “effective date” of an actuarial valuation is the date by reference to which the assets and liabilities are valued.