Credit Investor Presentation 2020/21
Defined Benefit Funding Consultation -
Long term objective (LTO)
Low dependency by time scheme is
significantly mature
Fast Track G+25/50, duration 12-14yrs
3 March 2020
Fast Track compared with Bespoke valuations
Covenant
Stronger covenants can take more risk but
trustees required reduce reliance over time
Fast track limited to 3 to 5 years
Investment strategy
Consideration of investment risk including
liquidity and hedging
Journey plan
Linkage from LTO to TPS
Stepping stones
Recovery plans and dividends
As short as affordability allows
Equitability of deficit recovery contributions
opposite dividends & management bonuses
Stressed schemes
Very long recovery periods or unsupported
investment risk will not qualify for Fast Track
Technical provision (TP)
Basis of funding
Maturity and covenant linked matrix of
acceptability for Fast Track
Contingent assets
Not allowed for Fast Track
Open schemes
Benefits accruing should be secure
The
Pensions
Regulator
Mangach
https://www.thepensionsregulator.gov.uk/en/document-library/consultations/defined-benefit-funding-code-of-practice-consultation
United Utilities
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Credit Investor presentation
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