2014 Pensions Reasonableness Review
Decision
Publication date
Industry sector
- Distribution Network
- Transmission Network
The price controlled gas and electricity transmission and distribution network operators (NWOs) are obliged to fund their defined benefit pension schemes, which were in existence at the time of privatisation. In common with many such schemes, these are generally in deficit. Ofgem provides funding allowances for the deficits relating to members’ service up to cut-off dates we have specified, providing certain conditions are met.
Following the triennial actuarial valuations obtained for these schemes, Ofgem carries out a review to assess the reasonableness of pension costs and re-set the funding allowances for these deficits.