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Direction to make modifications to the Pensions Regulatory Instructions and Guidance for RIIO Network Operator Licensees

Decision

Publication date

28 July 2017

Industry sector

Distribution Network
Transmission Network

Decision for

Notice to modify the Regulatory Instructions and Guidance held by Network Operators

We are publishing our decision to modify the Pensions Regulatory Instructions and Guidance (the Pension RIGs) for RIIO network operator licensees (NWOs).

In June 2017 we consulted on modifying the Pension RIGs. This was in light of our decision on Ofgem's policy for funding Pension Scheme Established Deficits (PSEDs) and changes to the chapter in the financial handbook that governs the treatment of pensions’ costs across successive price control periods. This policy decision clarified the nature of our commitment to provide funding for PSEDs of NWOs subject to price control under our RIIO regimes.

As part of our decision, we have considered responses to the consultation and where appropriate we have made changes to the proposed modification of the Pensions RIGs.

Triennially we carry out a reasonableness review of the NWOs established pension deficit allowances. The Pension RIGs provide guidance on how NWOs are required to report information to us so we can carry out these reasonableness reviews. NWOs will provide information to us in August and September which will inform the latest (2017) reasonableness review. We will publish the outcome of this review at the end of November 2017.