The defined benefit regime - Evidence and analysis
The regulator aims to promote a good understanding of the defined benefit (DB) funding regime and to operate in an open and transparent manner. This document sets out evidence on the way that schemes have used some of the flexibilities in the regime, notably with regard to discount rates, recovery plans, and contingent assets. As would be expected of a scheme-specific regime, practice varies.
It also provides information on the approach that informed our statement on DB funding in the current economic environment which we published earlier this year (April 2012). The analysis set out here includes a number of affordability measures and an assessment of how the approach to DB funding in our statement is expected to affect schemes.
Where appropriate, schemes can make use of a number of flexibilities in the system. In the following charts and graphs we illustrate the wide range of scheme circumstances and examine the variations in discount rates, recovery plan lengths and use of contingent assets.