TPT Retirement Solutions has deployed new software to model potential member outcomes and investment risks as it prepares to launch one of the UK’s first multi-employer collective defined contribution (CDC) schemes.
The pension provider developed the capability with Moody’s using its PFaroe software, which is already used for portfolio analytics and risk management by defined benefit pension schemes, consultants and investment managers.
The new functionality was designed specifically for CDC and combines valuation modelling with forward-looking projections of potential pension increases for members.
TPT said the modelling would support schemes during regulatory authorisation and once operational, including through asset-liability modelling to help inform investment strategy.
“As multi-employer CDC represents new territory, creating a robust scheme design is critical for the success of the scheme. Modelling capabilities like this will play a vital role.”
Paul Eagles, TPT Retirement Solutions
Paul Eagles, head of CDC at TPT Retirement Solutions, said: “We are excited to partner with Moody’s to develop and deploy its new solution to help bring CDC pensions to the UK.
“As multi-employer CDC represents new territory for regulators, the industry and, most importantly, members, creating a robust scheme design is critical for the success of the scheme – modelling capabilities like this will play a vital role.”
Preparing for multi-employer CDC
The software can be used by in-house actuaries and investment managers as well as external trustee advisers, including the scheme actuary, TPT said.
The launch comes as TPT prepares its multi-employer CDC proposition, which is subject to regulatory authorisation. The application process officially opened at the end of July.
However, questions remain over how widely CDC will ultimately be adopted. A recent Sackers survey found 61% of respondents were not confident that CDC schemes would gain significant traction.
Simon Robinson, senior director and product manager at Moody’s, said: “We are committed to delivering sophisticated risk management solutions across the UK pensions landscape and are pleased to develop PFaroe for CDC schemes.
“The flexibility of our software and ability to connect with our clients will be important in meeting the evolving needs of CDC as it grows in the UK.”
