The trustees of the Scheme and its employer, Serco Limited, were unable to reach agreement on the actuarial valuation with an effective date of 1 April 2009.
Initially, the regulator facilitated discussions between the trustees and Serco Limited to explore whether they could agree.
But as the negotiations were unsuccessful, the regulator reached the view that it was appropriate to consider exercising its funding powers. The regulator suspended its regulatory action due to further negotiations between the parties. These negotiations led to the trustees and Serco Limited (as well as Docklands Light Railway Limited) reaching a settlement.
Under this settlement, the Scheme’s funding deficit shown in the 1 April 2012 actuarial valuation (£36.1 million) will be cleared by January 2018, with over £20 million payable by January 2016. In total, there was an agreement to pay £37 million to the Scheme with £33 million coming from Serco Limited and £4 million from Docklands Light Railway Limited, the principal employer under the Scheme documentation.
A section 89 report has now been published setting out the action taken by the regulator in the case. Lesley Titcomb, chief executive at The Pensions Regulator, said:
“Our action in this case demonstrates we will work closely with schemes to address non-compliance but also that we have a low tolerance for late actuarial valuations.
“As late actuarial valuations can create uncertainty and could increase risks to both the scheme and the employer, we will consider whether to use our powers to protect member outcomes and ensure employers meet their obligations.”
You can find the report, section 89 reports, by clicking here.
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