Regulator reinforces importance of long-term for pension funds, with guidance to ensure short-term is navigated successfully

Regulator reinforces importance of long-term for pension funds, with guidance to ensure short-term is navigated successfully

30 Apr 2020

Today’s Annual Funding Statement from The Pensions Regulator reminds trustees that the focus for pension funds remains the long-term.

Whilst trustees have concerns over the short-term position for funding assessments and deferring of employer contributions, the Statement states that trustees should take their time over 2020 actuarial valuations until the economic conditions are clearer.  The statement guides trustees to use this time to understand possible scenarios on how current events may play out, review assumptions and perform diligence on the employer.

Danny Vassiliades, partner at XPS Pensions said:

“Trustees are being reminded of the principles of good risk management across investment, funding and especially in employer covenant to help navigate through the current economic conditions, effectively buying time until they can be more confident of what the future holds. In any event, trustees should ensure that they are being treated equitably compared to other creditors, and will expect to participate in any employer’s recovery, when that time eventually comes.”