Partner Rosalind Connor comments in the Financial Times on TPR’s aims to implement a “twin-track” approach to ensure schemes’ valuations are legally compliant
Pension schemes will be looking at choosing between two different approaches for their valuations in a consultation for a shake-up of the funding regime for thousands of company retirement schemes unveiled by the industry regulator.
In the consultation, the regulator set out a “twin-track” approach for trustees to demonstrate that the valuations agreed for their schemes are legally compliant.
Trustees opting for the “fast track” approach would work around funding and recovery plan guidelines set by the regulator and subsequently receive “minimal regulatory scrutiny” under the consultation proposals.
In contrast, trustees opting for “bespoke” valuations would have more flexibility, for example on level of investment risk, but would be subjected to greater oversight from the regulator.
Rosalind commented:
“Fast track will probably be taken as the standard and therefore ‘good’. So if you have a scheme where actually the fast track doesn’t fit its structure, it will take a bold trustee and employer (and a rich one!) to move to bespoke.”
Read Rosalind’s comments in the Financial Times.
The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. Arc Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.