Where they do not meet individual parameters, the scope of our engagement will likely be limited to those areas. If a scheme meets all the Fast Track parameters, we are unlikely to scrutinise the valuation submission further. It represents our view of tolerated risk for a scheme and sets out a series of quantitative parameters that need to be met. the long-term strategy being appropriate and in line with the legislationįast Track is one possible approach that aims to provide trustees with a simpler path to demonstrating compliance.įast Track is not risk-free for trustees.if the scheme or employer’s circumstances are unusual or complex, the reasoning for this and how that is reflected in the plan.the recovery plan, including deficit repair contributions (DRCs), meeting the ‘reasonably affordable’ principle.the funding and investment risk being supportable by the employer covenant and in line with the maturity of the scheme.If trustees submit a Bespoke valuation, the level of evidence and explanation required in the statement of strategy will depend on the level and complexity of the risk being taken. have genuinely unique employer circumstances that necessitate a different approach.cannot meet the Fast Track recovery plan length based on demonstrable employer affordability constraints.want to take more risk than available under Fast Track and can demonstrate that the total risk run by the scheme is supportable by the employer covenant and in line with the maturity of the scheme.Trustees may submit a Bespoke submission if they: Bespoke submissions are principles-based but with clear boundaries based on the legislative requirements and expectations in our code.īespoke valuation submissions are available for all schemes if legislation and key code principles are followed. Bespokeīespoke offers trustees greater flexibility and scope to select an approach that suits the specifics of their scheme. If the statement of strategy clearly evidences and explains how the approach meets legislation and key code principles, trustees can expect minimal scrutiny and engagement with us, if any. The complexity of the risks being taken will determine the level of evidence and explanation required. New legislative requirements mean all trustees have to submit a certain amount of quantitative and qualitative information to us in a statement of strategy. The Bespoke approach is intended to allow trustees to still have the flexibility to select scheme-specific funding solutions if the funding approach and actuarial valuation meet legislative requirements and follow code principles. If a valuation submission meets a series of Fast Track parameters, we are unlikely to scrutinise it further and it is less likely that we will engage with trustees. The Fast Track approach will act as a filter for our assessment of actuarial valuations that are submitted to us. Where the draft code sets out our expectations for compliance with the legislation, Fast Track will provide more direction and clarity on our view of a level of risk that we will tolerate. The legislation and code principles will need to be followed. Both Bespoke and Fast Track are equally valid, following one or the other does not automatically equate to compliance. We are proposing a twin track approach to assessing valuations – Bespoke and Fast Track. Our corporate strategic goals and objectives – the approach has been designed to support our strategic aims and is underpinned by our objectives to ensure savers’ money is secure and decisions are made in savers’ interests.ġ.Modelling and analysis – assessing the potential impacts on schemes and balancing risk to members, employers and the Pension Protection Fund (PPF) to help set Fast Track parameters.Consultation responses – there was broad support for our regulatory approach and some concerns, which we have highlighted in our consultation response document.The likely shape of legislation – the Pensions Schemes Act 2021 and the draft Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2023.Our regulatory approach has evolved since our first consultation in light of several factors: How we plan to assess and regulate DB funding in the future.Our twin track regulatory approach – Bespoke and Fast Track.Our approach to risk when developing the regulatory approach. In this section we provide an overview of our new regulatory approach and how we have developed our thinking in the following areas:
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