Hymans Robertson adapts ‘Segment Identifier Tool’ to help schemes meet Regulator expectations through COVID-19
14 May 2020
- Re-designed tool helps schemes navigate COVID-19 successfully by quickly identifying areas for improvement
- Enables schemes to focus on long term planning and managing risks
A free tool to show UK pension schemes how the Pensions Regulator (TPR) would categorise them has been updated to help schemes understand what is expected of them during the uncertain period caused by COVID-19. Hymans Robertson, the leading pensions and financial services consultancy, has used the principles set out in this year’s Annual Funding Statement to re-design the online analysis, which is available to all schemes.
The Regulator has made it clear that it is continuing to look at segmenting businesses and schemes into graded categories, allocated according to three key drivers; funding strength, covenant and scheme maturity. By categorising in this way TPR is able to be much more directive about its expectations. In five steps this tool will generate a tailored summary informing schemes what actions TPR might expect them to take about covenant, investment strategy or funding.
Explaining why it’s so important for schemes to clearly understand what TPR expects of them Laura McLaren, Partner, Hymans Robertson, says:
“The speed and scale of the COVID-19 crisis has had a severe impact on the economy and businesses around the globe and taking the time to fully understand TPR’s expectations for schemes is more important than ever. This ongoing uncertainty and the prospect of further regulatory change on the horizon in the form of a new funding code, means that we expect all trustees and sponsors will need to work harder to demonstrate they have a clear, robust plans in place. This year’s Annual Funding Statement was clear that scheme’s focus should remain on long-term plans and robust risk management, while areas such as contingency planning and fair treatment also featured heavily.
“In this uncertain time, many Trustees are also being asked to support the sponsor over a difficult, but hopefully temporary period. In light of this, Trustees should especially consider, if they haven’t already, whether their sponsor’s covenant strength has now changed and how their scheme funding plans may have been impacted. Short term adjustments may be required to take account of the current environment.
“Trustees which respond to this tool will have a clear picture of where action needs to be taken. Schemes can then prioritise their next steps and work more efficiently, making sure that any changes are implemented smoothly at both a strategic and operational level. Schemes which fail to act may be at risk of TPR intervention.”