Is your Scheme ready for Fast Track?

This tool shows whether your Scheme might fit into The Pensions Regulator's 'Fast Track' funding regime or what changes might be needed to pass the 'Fast Track' tests, based on the Funding Code that was laid before parliament on 29 July 2024.

You will need the following information to use this tool (approximate figures are fine, as this is an approximate model).

  • A Technical Provisions (TP) liability value and discount rate
  • The proportion of your liabilities that relates to pensioners
  • Current asset value, with its allocation to growth/income assets and hedging level
  • Recovery plan length and annual amounts

You can also use it to test what would happen if you had a change in funding or strategy.

You can read more about the Code in our Briefing Note.

Begin by inputting information about your scheme using the three tabs below (and flex to see changes).

Limitations

This tool is designed to give a broad comparison of an individual scheme's strategy relative to The Pensions Regulator's (TPR) Fast Track based on the Funding Code document that was laid before parliament on 29 July 2024. This tool does not constitute advice and must not be relied upon. By using this model, users implicitly agree that Hymans Robertson LLP are not to be liable in any way.

This tool is approximate, and users should only use this tool as a possible indication of impact. Further detailed modelling will be required to fully assess how specific scheme plans compare.

The scheme specific modelling uses a high-level approach, based on the characteristics of a typical scheme. The key assumptions in the model within this tool are:

  • The duration of pensioners and non-pensioners is 10 and 19 years respectively
  • The inflation sensitivity of the scheme liabilities is 70%

How we have approached the Fast Track Tests

 To make this tool easier to use we have simplified the Fast Track tests (and the scheme information needed to do them) in the following ways:
Technical provisions test
Assuming that the Scheme's technical provisions basis is in line with the prescribed Fast Track low dependency funding basis assumptions aside from the discount rate. A simple basis switch is performed to convert the technical provisions into the gilts+0.5% p.a. low dependency liabilities.
Recovery plan test
Allowing for regular annual deficit reduction contributions over a fixed recovery plan length. Recovery plans with 'back-ended loaded' contributions are unlikely to be allowed in Fast Track.
Investment stress test
Using the investment stresses in the Funding Code document and a simplified grouping of asset allocation into growth (for equities etc.), income (credit, property etc.) and an approximate conversion of the hedging level into bonds.
Future service duration
We make no allowance for future service duration in the tests.

To meet the Fast Track requirements Scheme's must calculate low dependency liabilities in line with TPR's assumptions and meet expenses in a particular manner. These requirements are not assessed by our tests.

There is a maximum of 2x leverage allowed on your bond portfolio to fit into Fast Track. This is not explicitly allowed for in the app.

For further information please get in touch with one of our experts or your usual Hymans Robertson contact.