The Pension Protection Fund (PPF) has published contingency planning guidance for trustees to help them manage risk.
In its Contingency planning for employer insolvency document, published today (23 April), the lifeboat fund issued practical tips for trustees to help prevent schemes entering PPF assessment when risk planning has not taken place.
In-house pensioner payrolls have previously been at risk after the employer had entered insolvency without warning. In more than 10% of recent cases, the PPF has had to ensure pensioners were paid.
In order to avoid this, the guidance for trustees includes ensuring payroll information is accessible, having a complete list of employers attached to the scheme, and creating a strategy for communicating with members and the media in the event of employer insolvency.
The report also outlines that trustees should speak to the PPF to make sure they're adequately prepared for entering assessment.
The lifeboat fund worked with The Pensions Regulator (TPR) to produce the guidance, with the regulator expecting trustees to have a "working knowledge" of the scheme's governing documents and to work with them to provide appropriate support to members.
PPF director of scheme services Sue Rivas commented: "The guidance we've published today gives information about the simple but effective steps we recommend trustees put in place to mitigate some of the risks resulting from employer distress, particularly those areas which affect members and risk delaying completion of a PPF assessment period."
TPR executive director of regulatory policy, analysis and advice David Fairs said adequate risk management is "vital".
The new guidance "highlights the need for trustees to maintain the high standards of governance and administration we expect, even during unexpected situations such as employer insolvency or a loss of infrastructure", he added.
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