The level of Bond required as security to the Kent Pension Fund (the Fund) will also be certified by the actuary based on their assessment of risk. The Bond covers the risk of:
- underfunding at the end of the contract
- early retirement strain costs
- unpaid contributions
The Bond must be maintained for the whole duration of the admission bodies’ participation in the Fund.
Providing a Bond
As detailed in the 2013 regulations, the following are qualified to provide a Bond:
(a) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits or to effect and carry out contracts of general insurance
(b) a firm in an EEA state of the kind mentioned in paragraph 5(b) and (d) of Schedule 3 to that Act, which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to accept deposits or to effect and carry out contracts of general insurance, or
(c) a person who does not require permission under that Act to accept deposits, by way of business, in the United Kingdom.
Where, for any reason, it is not desirable for an admission body to enter into an Indemnity or Bond, the admission agreement provides that the admission body secures a guarantee in a form satisfactory to the administering authority.
(a) a person who funds the Admission Body in whole or in part
(b) in the case of an Admission Body falling within the description in paragraph 1(d), the scheme employer referred to in that paragraph
(c) a person who—
(i) owns, or
(ii) controls the exercise of the functions of, the Admission Body, or
(d) the Secretary of State in the case of an Admission Body—
(i) which is established by or under any enactment, and
(ii) where that enactment enables the Secretary of State to make financial provision for that Admission Body.