The Pensions Act 1990 requires defined benefit schemes to maintain funding at a certain level (generally 100 per cent). The Act provides that defined benefit schemes must prepare and submit actuarial funding certificates at 3 yearly intervals. The purpose of the actuarial funding certificate is to enable the scheme actuary to certify whether or not it meets the funding standard i.e. whether or not the scheme had been wound up at the effective date of the certificate, its assets would have been sufficient to meet its liabilities.

Where a funding certificate is prepared which certifies that a scheme does not satisfy the funding standard, a funding proposal must be submitted to the Board by the scheme trustees along with the certificate to which it relates. The funding proposal must be designed to ensure that, in the opinion of the actuary, the scheme will meet the funding standard within a permitted period (usually 3 years, although the Pensions Board can allow a scheme 10 years or more to meet the standard in certain circumstances).

Last September, in view of the ongoing difficulties being faced by defined benefit schemes in Ireland, the Pensions Board granted a six month extension to the deadline for such schemes to submit funding proposals. Earlier this month, in order to allow scheme trustees to consider the changes to the Pensions Act announced in the Social Welfare and Pensions Act 2009, the Board announced a further extension in the deadline for defined benefit schemes to submit funding proposals for approval.

The new extension allows schemes which had a negative Actuarial Statement with an effective date between 31 December 2007 and 31 December 2008 inclusive, or which require a funding proposal because of an Actuarial Funding Certificate with an effective date between 31 December 2007 and 31 December 2008 inclusive to submit a funding proposal within two years of the Statement or Certificate.