Exclusive: Hymans Robertson launches DB funding early warning tool

The consultancy's tool will measure the scheme's strategy against each of The Pensions Regulator's (TPR) proposed tests under the fast track option, telling them which they would pass or fail, while also setting out what possible additional costs could be to be compliant.

It comes as the watchdog continues to consult on the proposed principles to underline the proposed revision of the regime, closing on 2 September, with a further consultation on the overall regime due to begin later.

Hymans Robertson said schemes would be able to identify if there were any areas where they would need to take action early, allowing a smooth implantation on both a strategic and operational level.

Speaking to Professional Pensions, partner Laura McLaren explained: "The background to this tool is really about helping schemes prepare for the new funding code of practice and, specifically, to think about if they might have a preference for going down either the fast track or bespoke routes.

"We've looked at the four key fast track tests and schemes can input some relatively simple data about covenant strength, scheme maturity, and funding and investment plans to see how they match with the tests to get a better idea of whether their current strategy will enable to go down the fast track route, or whether they need to reshape the current plans.

"It's about early preparation and action."

The tool will help schemes to think about whether they need to evolve their recovery plans, for example, as well as test the potential impact of any change in covenant of funding.

Earlier this week, TPR executive director of regulatory policy, analysis and advice David Fairs told PP Live that, while the Covid-19 crisis had reinforced the watchdog's belief in the principles, it was possible the impact could result in fast track terms could change as the year progresses.

McLaren recognised that the proposed DB code was not yet set in stone, and stated: "The consultation is evolving and a lot of that specific parameter guidance will be key. The structure of the framework, however, is pretty fixed, and therefore giving schemes the ability to map is helpful.

"But we will look to make this a dynamic model. It is about early warning not absolute results."

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• Topics
• Admin / Technology
• Defined Benefit
• Hymans Robertson
• Laura McLaren
• TPR
• David Fairs
• DB funding code
• The Pensions Regulator