New tool will help schemes prepare for tougher TPR demands
17 Jun 2019
- ‘Segment Identifier Tool’ will help schemes navigate regulatory change by quickly identifying potential areas for improvement.
A free tool to show UK pension schemes how TPR would categorise them has been developed by Hymans Robertson. Using the principles set out in TPR’s Annual Funding Statement the online analysis is designed to help schemes understand what would be expected to fulfil the regulator’s next steps as they prepare for its “cleaner, quicker, tougher” approach.
The ‘Segment Identifier Tool’ developed by the leading pensions and risk consultancy will use four key criteria; employer covenant, recovery plan length, strength of funding target and scheme maturity, to assess which of TPR’s segments is most appropriate. The results generated will then inform schemes what actions TPR might expect them to take with regards to covenant, investment strategy or funding.
Laura McLaren, Partner at Hymans Robertson explains why it’s so important for schemes to clearly understand what TPR expects of them:
“This year’s Annual Funding Statement was the regulator’s clearest announcement to date on the standards it expects from the UK’s pension schemes. The report sets out explicitly how it intends, and is willing to, intervene with schemes that don’t meet its expectations.
“Following the high profile scandals of BHS and Carillion it’s obvious that TPR has adopted a tougher stance and many schemes have already felt the impact of this. Trustees and sponsors should act now to ensure their scheme is up to scratch on areas such as employer covenant. The existence of clear funding and investment plans will also be assessed. By identifying where the need to take action lies, schemes can prioritise their next steps and work more efficiently. This can ensure that any changes are implemented smoothly at both a strategic and operational level. Schemes which fail to prepare and act now will ultimately risk being caught on the back foot by a reinvigorated and stronger regulator.”