Lincoln Pensions has launched a new scheme projection and risk modelling tool for trustees and sponsors.
This new tool has been created ahead of The Pension Regulator’s new funding code of practices, which is expected to place increasing emphasis on journey planning.
PensionSketch uses a scenario-based approach to help plot out a future plan for the scheme that balances all key risks. This integrates both sponsor and scheme modelling and includes a risk radar that provides a dynamic assessment of the risks that each potential journey plan entails.
Lincoln Pensions, a specialist pensions covenant advisory firm, says the new tool is designed to improve planning in three key areas:
- End-state decision-making – enabling decisions to be made in the context of long-term covenant reliability.
- Journey plan length – which can be benchmarked relative to covenant visibility.
- Investment risk – which can be considered relative to sponsor risk capacity.
The new funding code is also likely to benchmark acceptable fast-track valuation submissions relative to both scheme maturity and covenant strength.
Lincoln Pensions managing director Michael Bushnell says: “The TPR’s funding code has given the industry a new focus, as schemes will now need to incorporate funding, investment and covenant variables into different journey plan scenarios.
In response, we’ve created PensionSketch, the first fully integrated journey planning tool. PensionSketch is unique in modelling both the scheme and sponsor, allowing for a dynamic assessment of scheme risks relative to sponsor support mapped across a range of scheme’s possible journeys. More than ever, schemes need to be thinking about the long term across a range of risk scenarios and we hope this tool can be additive to their journey towards securing member benefits.”
Lincoln Pensions now offers a range of proprietary technology tools including its PensionSim scheme scenario simulator.