Commentary on Sections Summary Valuation of assets and liabilities Section 143: Board’s obligation to obtain valuation of assets and protected liabilities
472.This section requires the Board to obtain an actuarial valuation of the assets and liabilities of the scheme in order to determine whether the assets of the scheme are less than the protected liabilities. It must make this determination so that it can decide whether it is required to assume responsibility for the scheme.
473.Subsection (2) states that the Board must, as soon as is reasonably practicable, obtain an actuarial valuation of the scheme as at the relevant time. This is the time before the qualifying insolvency event mentioned in section 127 (duty to assume responsibility for schemes following an insolvency event), or, as the case may be, before the application or notification under section 129(applications and notifications for the purposes of section 128) was made or received.
474.Subsection (3) provides that if the requirements set out in regulations are met, regulations provide that the following are to be assets or protected liabilities for the purposes of this valuation:
	a debt due to trustees or managers by virtue of a contribution notice under section 38, 47 or 55;
	an obligation arising under a financial support direction (see section 45);
	an obligation imposed by a restoration order (see section 52).
475.Subsection (4) provides that regulations may prescribe how the assets and the protected liabilities of eligible schemes and their amount or value are to be determined, calculated and verified. Regulations may provide for the valuation to take account of events occurring during the period beginning with the relevant time and ending with the time the valuation is approved under section 144, when valuing certain assets and liabilities. Those assets/liabilities are
	a section 75 debt;
	a debt due by virtue of a contribution notice issued under section 38, 47 or 55;
	an obligation arising under financial support for the scheme;
	an obligation imposed by a restoration order made under section 46 in respect of a transaction involving assets of the scheme. This is in order that the Board need not assume responsibility for a scheme which could be wound up to the benefit of members.
476.Subsection (6) states that subject to any provision made in regulations under subsection (4), a valuation must accord with any guidance issued by the Board.
477.Subsection (7) states that when calculating the amount of any liabilities, a provision of the scheme rules which limits the amount of the scheme’s liabilities by reference to the value of its assets is to be disregarded. Such a rule places an artificial restriction on the value of a scheme’s liabilities.
478.Subsection (8) provides that when the Board ceases to be involved with a scheme it no longer has a duty to obtain an actuarial valuation under subsection (2). It is, for example, possible that the employer and associated pension scheme could be rescued before the valuation is completed, and in such circumstances it would not be necessary to complete the valuation.
479.Subsection (9) provides that the Board need not undertake an actuarial valuation of a scheme when it considers that an event (such as a repayment of a debt or other event as listed in this subsection) may occur. Such an event could affect the value of the assets or the amount of the protected liabilities of the scheme for the purposes of the valuation.
480.In addition, under subsection (10) provision has been made to take account of the Board having power to review ill health awards. This means that the Board cannot be required to obtain the valuation whilst it may review ill health pensions under section 140. This is because such a review may affect the valuation.
481.Subsection (11) defines “actuarial valuation” as a valuation of assets and protected liabilities of the scheme that is prepared and signed by a person with the appropriate qualifications or experience or a person approved by the Secretary of State. The necessary qualifications on experience will be detailed in regulations. The form of the valuation and the information to be contained within the valuation will be set out in regulations.