Pensions - Articles - One in five DB pensions are in TPRs weakest category


TPR’s latest Funding Statement was its clearest statement to date on the regulatory expectations it has for DB pension schemes. TPR’s research has graded schemes into one of five categories (A-E) - after taking covenant strength, scheme maturity, recovery plan length and funding targets into account. Hymans Robertson has then examined these results to create a benchmarking report for the DB universe.

 The analysis by the leading pensions and risk consultancy found that only half of DB schemes are in the strongest category (A) while a significant proportion, 21%, are in the weakest classifications (D and E). 

 Those schemes which have been graded as weaker are therefore more at risk of receiving regulatory intervention from a stronger TPR. In fact, Hymans Robertson’s trustee research found that over a fifth (22%)* of trustees had already been subjected to, or expected to experience intervention from TPR before their next valuation.

 Laura McLaren, Partner explains how trustees and sponsors should use this information: “It’s striking that just over a fifth of Trustees are actively expecting or have already experienced some kind of regulatory intervention from the Pensions Regulator. Additional scrutiny and change is on the horizon in the form of a new DB funding code, as well as stronger regulatory powers for TPR, and we expect that most trustees and sponsors will now have to work harder to demonstrate they have a clear funding plan in place.

 “This year’s Annual Funding Statement from TPR was its clearest to date, in terms of the regulatory expectations it has for DB schemes. Trustees and sponsors should make sure they continue to pay close attention for more information on the exact form the regulator’s new framework will take and the additional powers they may have. Fairly straightforward steps such as understanding how a DB scheme compares to others and crucially, how it may be perceived by TPR, will be advantageous. For example, this may allow schemes to prioritise any required changes and identify where they might be taking unnecessary levels of risk. By addressing these areas early, trustees and sponsors will be in a stronger position and more likely to avoid unnecessary intervention.”
  

 A Benchmarking Report for the DB Universe

 1 in 5 DB schemes in TPR's weakest category 

Back to Index


Similar News to this Story

The PPF launch the 14th edition of The Purple Book
In its fourteenth edition of The Purple Book, the Pension Protection Fund (PPF) reveals a strong link between investment risk and underfunding in defi
Industry comment on the 14th edition of the PPFs Purple Book
Industry comment from Hymans Robertson Lincoln Pensions and Clara Pensions on the 14th edition of the PPFs Purple Book
Final report of ACA 2019 Pension trends survey
ACA survey report says momentum of pension reform needs to be built upon with plans set out to increase automatic enrolment minimum contributions alon

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.