On 26 September, the Pensions Regulator published its first analysis of recovery plans submitted to the Regulator up to the end of July of this year. According to the Regulator, the analysis revealed several trends, namely that 30% of plans did not trigger further action by the Regulator, and a significant proportion of those schemes that did only required further information or clarification by trustees. Another statistic to come to light is that 80% of schemes are producing plans of no more than 10 years’ duration, and that mortality assumptions are based on the medium cohort.
The most significant finding according to the Pensions Regulator is that, as it feared, schemes are using the four “triggers” as targets – a use for which they were not intended. The Regulator has stressed that recovery plans should be designed to be scheme-specific, and that this is the way in which the Regulator assesses them. The Regulator also highlighted some concerns that longevity assumptions are failing to reflect current industry debate on what may be considered prudent.
The analysis can be found at http://www.thepensionsregulator.gov.uk/whatsNew/pn07-14.aspx