4 May 2021: Argyll opens Leeds office

17 Jun 2020: TPR updates Contribution Deferral guidance

5 Aug 2019: TPR's tougher stance on recovery plans

7 Mar 2019: TPR’s Annual Funding Statement a game-changer

7 Dec 2018: DWP publishes superfund consultation

26 Jun 2017: TPR agrees settlement with Coats

30 Apr 2017: PM promises TPR M&A powers

28 Feb 2017: TPR agrees settlement with Sir Philip Green

9 Nov 2016: Brexit so far

8 Nov 2016: BHS ripple effect

2 Nov 2016: Sir Philip Green sent warning notice

1 Nov 2016: Argyll Financial becomes Argyll Covenant

3 Oct 2016: Tata Steel update

2 Jun 2016: BHS to be liquidated

29 Mar 2016: Tata plans sale of UK Steel

3 Sep 2015: TPR takes dim view of late valuations

13 Aug 2015: New TPR covenant guidance

28 May 2015: Contribution notice in Carrington Wire case

22 Dec 2014: Third warning notice for Guinness Peat

18 Dec 2014: New PPF rules for Asset-Backed Contributions

19 Aug 2014: TPR announces Lehman Brothers settlement

10 Jun 2014: TPR publishes revised funding code

27 Mar 2014: EC postpones holistic balance sheet

20 Mar 2014: PPF announces new insolvency risk model

17 Mar 2014: PPF guarantees harder to certify

7 Feb 2014: Argyll Financial submits consultation response

2 Dec 2013: Regulator publishes new draft funding code

19 Nov 2013: Asset-backed contributions guidance from TPR

22 Oct 2013: FSD warning helps MF Global scheme buyout

10 Sep 2013: TPR supportive of Kodak restructuring

31 Jul 2013: Schneider Electric acquires Invensys for £3.4bn

24 Jul 2013: Supreme Court overturns FSD super-priority

8 May 2013: Support for employers in TPR's Statement

2 Dec 2013: Regulator publishes new draft funding code
The Regulator today published its proposed regulatory approach to DB schemes and funding.  In addition to a revised Code of Practice ‘Funding Defined Benefits’ it also provided a strategy paper and a policy statement.  TPR has invited the pensions industry to comment on these documents by 7 February 2014.

The Code of Practice
This summarises the Regulator’s expectations for trustees.  As anticipated it is more of a summary of existing practice rather than a sea-change in its views.  However the draft code does now incorporate its proposed new statutory objective on sustainable employer growth.  The principal recurring themes are:
  • TPR expects trustees to manage covenant, funding and investment risks in an integrated way
  • Trustees should aim for deficits to be removed as quickly as employers can reasonably afford without unreasonably impacting on the employer’s growth and investment plans

Funding policy
Containing the same themes as the Code of Practice it sets out how TPR will balance its objectives and target its resources.  Scrutiny of individual schemes will be based on TPR’s assessment of how successfully schemes have been able to balance covenant, funding and investment risks.  A Balanced Funding Outcome factor will be calculated whereby the funding plan achieved will be compared against a ‘straw man’ appropriate to a scheme’s covenant and maturity.  Investment and mortality risk will also be taken into account.  The BFO factor will express how far a scheme deviates from TPR’s expected position with those that deviate further attracting greater scrutiny.  A ‘risk bar for intervention’ acts as a filter such that larger schemes representing a greater concentration of risk and call on the PPF, can expect greater attention.

Argyll comment:  With the exception of the introduction of TPR’s new objective on sustainable growth, we would regard the documents as very much a consolidation of TPR’s practice based on our experience and contact with the Regulator.  Even with a new objective, TPR has previously emphasised the flexibility around seeking employer support so in our view the documents represent more evolution than revolution which we welcome.  The Code of Practice echoes previous documents and highlights the need for trustees to consider independent support in assessing the covenant.  In our view the need for independent expert advice is greater now that trustees have to judge the merits of a company’s business plans and not just past performance.

Clear and concise analysis
Our approach
Our experience