Automation expected to limit impact of strategy statement rules
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The Pensions Regulator’s response to its consultation on defined benefit schemes’ statement of strategy does not bring many changes, but some have welcomed that TPR is now providing the statement of strategy spreadsheet as part of its new 'Submit a scheme valuation' digital service.
As part of its new DB funding regime, the regulator is requiring schemes to submit a statement setting out their funding and investment strategy. It consulted on the format of the statements in March last year and published its interim response in September, along with revised templates and information. The final response explains its approach in more detail.
Mark Tinsley, a principal at consultancy Barnett Waddingham, said the contents of the statement remain unchanged from TPR’s earlier interim response, meaning schemes still face “an extensive information request to produce a document that is unlikely to prove useful as a risk management tool in practice”.
Many in the pensions industry also see the cost and work involved in complying with the new strategy statement rules as unnecessary because of the improved overall funding position of DB schemes.
However, Tinsley called TPR’s release of the dynamic spreadsheet that schemes will use to compile and submit their statements a “notable advancement”.
“While the scale of the SoS remains substantial, the format and functionality of this spreadsheet demonstrate a real effort by TPR to heed industry concerns,” he said. “The new tool will allow for much-needed automation and simplification to the process, significantly reducing the workload compared to alternatives that would have required more manual intervention.”
Questions have been subdivided by speciality, which will enable collaboration between advisers and avoid duplication, he observed.
“While completing the statement of strategy will still be a considerable task, this development represents a pragmatic step forward,” Tinsley added.
