Costs, assets and liquidity plan (CALP)

CDC code in force: 31 July 2026

1. The CALP summarises the running costs and financial resources available to the scheme. It is not a document identified in the legislation, but the information contained in it is required for our assessment of financial sustainability. We expect the CALP to be consistent with the other information presented by the scheme, especially the continuity strategy.
2. For a single-employer CDC scheme the trustees should produce the CALP with the co-operation of any sponsoring employers. The CALP should cover a period of three to five years from the point the trustees agree it.
3. For a multi-employer CDC scheme, the CALP:
   1. forms part of the business plan produced by the scheme proprietor
   2. should be approved by the trustees
   3. should cover a period of three to five years from the ‘effective date’¹
   4. should include projections that match the period covered by the business plan
   5. can be presented as a separate document to the business plan²
4. Where a CALP is submitted for a multi-employer CDC scheme, it should match the period covered by the business plan.
5. The CALP should include:
   1. an estimate of the trustees’ or scheme proprietor’s risk appetite for their financial reserves and any support from employers or other parties
   2. a statement about the level of prudence in their estimates
   3. an assessment of the different levels of liquidity needed throughout the period covered by the CALP and continuity strategy
   4. details of the resources allocated to each section separately
   5. where the scheme has more than one section an explanation of assumptions and levels of prudence adopted throughout the document
   6. a range for any variable items, explaining how that range was reached
   7. an explanation of why any element not included in the CALP cannot be provided
6. The information presented in the CALP should be grouped into four sections, these are:
   1. costs in relation to benefits
   2. income in relation to benefits
   3. assets held to meet costs in relation to benefits
   4. liquidity of those assets 

Costs in relation to benefits

7. The information presented in the CALP on costs in relation to benefits should include the following:
   1. The estimated cost of running the scheme for each year of the period covered by the CALP. This estimate should include:
      1. the costs paid to asset managers or an in-house team to manage the scheme’s funds, whether deducted at source or not
      2. the costs incurred to implement the investment strategy
      3. the costs of advice taken on investments
      4. the remuneration and overheads associated with paying trustees and staff
      5. the cost of professional and other services commissioned by the trustees or scheme proprietor, including actuarial, audit and legal advice
      6. the cost of scheme administration, activities associated with receiving, making, and reconciling payments, compliance, and communications to members
      7. any costs incurred by the trustees, sponsoring employer, or scheme proprietor, including planning, communication, marketing, and any dedicated support provided by them to the scheme
   2. Details of any actual or potential financial liabilities arising from any contract between the trustees and a sponsoring employer, scheme proprietor or any service provider to the scheme.
   3. The estimated costs of compliance arising from the scheme’s duties in its continuity strategy, including:
      1. a breakdown of the activities required to carry out the duties in the continuity strategy
      2. an estimate of the compliance cost for each activity identified
   4. The estimated run-on costs³ after a triggering event, including:
      1. an estimate of the length of the run-on period after a triggering event
      2. an estimate of the monthly gross cash cost of running the scheme
      3. an estimate of the gross cash run-on costs for the run-on period after a triggering event
      4. the assumptions used in those estimates
   5. The following costs, and the strategy for ensuring that the scheme’s financial resources are sufficiently liquid to meet them as they fall due, including:
      1. the estimated costs of compliance during a triggering event period
      2. the estimated cost of closing and winding up the scheme after the transfer of assets
      3. the maintenance or replenishment of reserves if the scheme is following continuity option 3
      4. any provision made to fund contingent liabilities in respect of the scheme
   6. Details of the expected cash flows into and out of the scheme for every year of the period covered by the CALP. For multi-employer CDC schemes this should include the extent to which these cash flows will come from and go to the scheme proprietor.

Income in relation to CDC benefits⁴

8. The information presented in the CALP on income in relation to CDC benefits should include the following:
   1. The anticipated scale of the scheme at milestones set at least annually for the period covered by the CALP. Multi-employer CDC schemes should include details of any risks from failing to meet or exceeding any of the milestones. The selected milestones can be chosen at the discretion of the proprietor for a multi-employer CDC scheme, or the trustees for a single-employer CDC scheme. The selected milestones should as a minimum include:
      1. the number of members in the scheme that are entitled to CDC benefits, including estimates of those accruing benefits, those with deferred benefits and those drawing benefits
      2. any income from contributions paid to the scheme in respect of CDC benefits
      3. the assets under management or administration in respect of CDC benefits
      4. any income from charges on assets under management or administration in respect of CDC benefits
      5. any income from charges paid by participating employers any income from assets not designated to providing CDC benefits
      6. the number of participating employers in any sections of the scheme providing CDC benefits
   2. The assumptions and dependencies that informed the information presented at each milestone, together with a sensitivity analysis of those assumptions.
   3. Any sources of income for the scheme, including the estimated income from each source, for each year of the period covered by the CALP.
   4. The principal sources of income of each participating employer (single-employer CDC schemes) or scheme proprietor (multi-employer CDC schemes) as detailed by that company’s strategic report, to the extent that the income is available to the scheme.
   5. Information provided should also include an estimate of the monthly gross income due to the scheme for two years after a triggering event, or any shorter period determined by us, with reference to:
      1. the number of members in the scheme that are entitled to CDC benefits, including estimates of those accruing benefits, those with deferred benefits and those drawing benefits
      2. any income from contributions paid to the scheme in respect of CDC benefits
      3. the assets under management or administration in respect of CDC benefits
      4. any income from charges on assets under management or administration in respect of benefits
      5. any income from charges paid by participating employers
      6. any income from assets not designated to providing CDC benefits
      7. the number of participating employers in any sections of the scheme providing CDC benefits
      8. the assumptions and dependencies that informed the information presented at each milestone, together with a sensitivity analysis of those assumptions

Assets held to meet costs in relation to benefits

9. The CALP must include details of the assets available the trustees, either directly held or by having first call on them:
   1. A description, including values, of any haircuts applied to the assets at the effective date of the CALP, or for multi-employer CDC schemes, the business plan.
   2. The percentage of the scheme’s financial sustainability requirement met by the assets.
   3. The estimated assets needed to meet costs arising from the scheme’s compliance with the duties in its continuity strategy.
   4. The strategy for meeting any shortfall between the scheme’s income and the costs it will experience during the period covered by the CALP, or for multi-employer CDC schemes, the business plan.
   5. Details of any escrow agreement, bank guarantee, letter of credit, guarantee, commitment, indemnity, legally binding agreement, or insurance policy held by the trustees intended to cover any aspect of the financial sustainability requirement.
   6. The strategy for maintaining the short-term solvency of the business operations supporting the scheme, including information about the scheme’s ability to pay for services as those liabilities fall due.
   7. The text of any provision in the trust deed and rules providing that trustees, employers, the scheme proprietor or other third parties must pay the amounts shown in the ‘Costs in relation to benefits’ section of the CALP.
   8. The text of any provision in the trust deed and rules that empowers any person to change the rule about who is liable to meet the costs of the scheme.
   9. Where a scheme is providing non-money purchase benefits, details of how any debt the employers may be liable for under section 75 of The Pensions Act 1995 is to be apportioned in accordance with section 75A of that Act.
   10. Details of any existing or expected lending by the trustees, including the identity of the borrower, the loan amount, the interest rate, the repayment date, and any security taken by the trustees.
   11. Where the scheme is reliant on an employer, or employers, to support the costs of the scheme, the information set out in the Employer support module.

Liquidity of those assets

10. The reserves held by a scheme will be needed at various times and can have different levels of liquidity according to the costs they are addressing5.
11. Trustees and scheme proprietors must assess and document the different levels of liquidity they will need throughout the period covered by the business plan and continuity strategy. If a scheme proprietor operates more than one scheme or section, the funds allocated to each scheme or section should be separately identified. This may mean that the assets are held in different ways, depending on how the funding obligations are determined.
12. The way funds are held in each scheme is likely to be different and in keeping with the way it is funded and operated. However, we are unlikely to be satisfied by a scheme:
    1. with cash, or near cash, assets that are less than 15% of the calculated necessary financial resources
    2. that holds a significant level of non-marketable or illiquid assets in its financial reserves
    3. with marketable assets held as part of the financial reserves that are not admitted to trading on regulated markets
    4. that relies on the sale of directly held physical assets, for example property, as an element of its financial reserves
    5. where a significant proportion of the scheme reserving requirements are directly
       met by charges on, or revenues from, scheme assets

Legal references

¹ Section 14A of the Pension Schemes Act 2021

² Paragraphs 1, 2, and 26 of Schedule 1B to the Pension Schemes Act 2021

³ Section 14(2)(b)(ii) of the Pension Schemes Act 2021, paragraph 1(b)(ii) of Schedule 3 to the 2022 Regulations, and paragraph 1(b)(ii) of Schedule 3 to the 2025 Regulations

⁴ Paragraph 1(a)(iii) of Schedule 3 to the 2022 Regulations and paragraph 1(a)(iii) of Schedule 3 to the 2025 Regulations

⁵ Paragraph 4(a)(i) of Schedule 3 to the 2022 Regulations and paragraph 4(a)(i) of Schedule 3 to the 2025 Regulations

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