Long term planning

Details of requirements to plan for the long-term funding of defined benefit pension schemes.

Low dependency investment allocation
An investment strategy defined as part of the low dependency requirements. The value of the assets relative to the value of the scheme’s liabilities must be highly resilient to short term adverse changes in the market.
Low dependency funding basis
A set of actuarial assumptions derived assuming the scheme is invested in the low dependency investment allocation. If a scheme were fully funded on this basis, no employer contributions would be expected.
Relevant date and significant maturity
The relevant date determines when a scheme must reach low dependency. Significant maturity is used in determining the relevant date.
Employer covenant
An assessment of the financial ability of the employer to support the scheme in relation to its legal obligations and any expected support from contingent assets.
Journey planning
The trustees’ plan to bridge from the current strategy to the low dependency funding target. Before reaching low dependency, a scheme can take risk which is supportable.
Statement of strategy
A written statement recording the funding and investment strategy and supplementary matters.

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