This website is about the “minimum funding requirement”. If you neither know, nor care, about this somewhat aracane actuarial concept, I suggest you may wish to surf somewhere else. Or stay around if you want, noone is excluded.

The concept is that the funds held from time to time should be no lower than a prescribed minimum. This contrasts with the excessive surpluses legislation which came into force in 1987 (10 years earlier than MFR), where the maximum fund was prescribed.

The MFR came into force in April 1997, as one element of the Pensions Act 1995. In 1999, DSS commissioned a review of the MFR framework from the actuarial profession and the profession’s report was submitted to DSS in May 2000. A consultation process started in October 2000 and finished at the end of January 2001.

In March 2001, the day before the Budget, Paul Myners delivered his wide ranging review and, among other things, recommended that MFR be abolished . This appears to have been accepted by HMG but the timing is still far not clear. The MFR remains in force for some time. So will the Schedule of Contributions, which, I think, is disliked even more than the MFR.

Before the MFR is amended (if that is what happens), I think it is worth recording the main features of what is currently in place.  As I find it easier to “see” things in diagrams, that is my chosen format.

If you do find anything wrong, please tell me about it

However, I specifically refuse to guarantee that there are no errors, whether major or minor, in the following. Any and all rights in this website are asserted and reserved.

When further hard information becomes available, I shall extend this site, but it will take me some time so please be patient.

Updates

July 2001               February 2002

September 2002     August 2003

proceed at your own risk!

Update (26 August 2003) Yes, DWP did issue a consultative document in November 2002. No, I didn’t bother to include it, because it was so tame. Once the Inland Revenue’s further proposals are issued (in September 2003, I think), I’ll reconsider updating for DWP’s piece of the action. There will definitely be some stuff on Inland Revenue simplification! Oh, the style has been further amended to fir in with other sites.

Update (2 September 2002) My, doesn’t time fly when you’re having fun. In advance of its abolition, four interim amendments were prumulgate in March 2002. So far, it is not generally known what will happen to MFR and when that will be. Although the Pickering report was issued in the summer, it was so tame that I have felt it worth little space. The Inland Revenue simplification report is anticipated in Autumn 2002 but the timing may slip.

Update (6 February 2002) Yes, it’s been a while but this week saw some action from DWP and HMT. In a few weeks time, I hope to have updated the site so do come back. For now, I have changed the look/feel.

Update (26 July 2001) Some material on Myners and the possible MFR revision is now included.