UK regulator gives contingency guidance
The Pensions Regulator has issued guidance on the use of contingent assets that can be used in the calculation of technical provisions or for underpinning recovery plans.
“This is aimed at trustees who are considering including contingent assets as part of their funding strategy, and is also likely to be useful to employers and advisers,” the body said in a statement.
“The guidance explains that contingent assets can either support the calculation of technical provisions or underpin a recovery plan, and provides examples of where they might be used.”
It also explains how trustees might use the flexibility of contingent assets in a way that can: improve the security of benefits for members, support investment in return-seeking asset classes and help the employer remain viable.
It said the guidance “encourages trustees to understand the employer’s financial position and why the use of the contingent asset might be advantageous”.