Funding standard and funding standard reserve
Under the funding standard provisions of the Pensions Act, defined benefit pension schemes (excluding certain schemes primarily in the public sector) are required to prepare and submit actuarial funding certificates (AFCs) at three yearly intervals, to the Pensions Authority. Since 2012, such pension schemes must also prepare and submit funding standard reserve certificates (FSRCs) at similar intervals.
The purpose of an AFC and a FSRC is to enable the pension scheme actuary to certify whether or not the scheme meets the funding standard and funding standard reserve. AFCs and FSRCs must be submitted to the Authority in accordance with the time limits detailed in the Pensions Act.
If the pension scheme does not meet the funding standard or funding standard reserve, a funding proposal must be submitted to the Authority in accordance with the time limits detailed in the Pensions Act.
Schedule BE – funding standard reserve certificate
With effect from 27 May 2013 the percentage prescribed under section 44(2)(a) of the Pensions Act, for the purpose of the funding standard reserve is 10%. This percentage should be used for all FSRCs that have an effective date of 27 May 2013 or later. The percentage to be used for FSRCs with an earlier effective date is 15%.