Section 222 — Pensions Act 2004: The statutory funding objective

The statutory funding objective 222 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. 2A The scheme's technical provisions shall be calculated in a way that is consistent with the scheme's funding and investment strategy, as set out in the scheme's statement of strategy.

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 , subject to subsection (2A), 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.