TPR to increase information requirements on DB asset allocation from 2023

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The pension regulator (TPR) has confirmed that it will continue with plans to ask administrators of defined benefit (DB) pension plans for more information on how they allocate their assets from 2023.

In its response to its recent joint consultation with the Pension Protection Fund (PPF), the regulator explained that information will be requested at three levels of detail, depending on the size of the plan.

Small schemes, those with assets not exceeding £ 30million, will be required to provide a baseline,
although that threshold remains under review, with the expectation that it will be reduced to £ 20million or less in the future, in light of industry feedback received during the consultation.

More detailed information will be requested for programs with assets between £ 30m and £ 1.5bn, and programs with assets of £ 1.5bn or more will need to provide sensitivity information. portfolios with investment constraints.

The additional data, collected from the plans ‘annual reports, should help TPR assess the plans’ investment risk and support the PPF in calculating its withdrawals.

TPR noted that most of the 29 respondents to the joint consultation supported the proposals, in particular the need for plans to provide more detail on bonds, which make up about 70 percent of defined benefit pension plan assets.

In light of this, the regulator has confirmed that plan returns from 2023 will require bonds to be divided into investment grade and investment subclass and, for some plans, by duration, to more accurately capture the level of risk.

It is hoped that a better risk assessment will allow companies to reduce the mismatch between assets and liabilities and allow TPR to focus on programs where the greatest risks to savers remain, in turn reducing the bad ones. results among savers.

The regulator is currently developing the IT necessary to allow the establishment of a new return regime from 2023.

Commenting on the plans, TPR Executive Director of Regulatory Policy David Fairs said: “Saver protection is our top priority and this additional data will give us a more detailed picture of how trustees manage their investments. members.

“This will give us a better overview of DB funding while also pointing out any potential concerns about a particular plan’s approach to risk management.

“Recognizing the burden on plans as we come out of the impact of the Covid-19 pandemic, we have decided not to ask administrators for this additional information until we issue our plan statements in 2023. . “


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