AI Summary of 26L. Stress-test.
The Pensions Authority possesses the authority to mandate trustees of a scheme or trust RAC to conduct a stress-test to identify and monitor potential financial deterioration. This requirement is communicated via a written notice that outlines the necessary information regarding the stress-test, including methodologies, economic scenarios, and reporting timelines.
The stress-tests focus on evaluating the effectiveness of existing strategies for identifying adverse economic events and the capacity of the scheme or trust RAC to endure these changes. Results must be reported within three months or by a specified date, with the Pensions Authority responsible for reviewing the outcomes.
26L. Stress-test.
(1) Without prejudice to section 26K, the Pensions Authority may, by notice in writing, require the trustees of a scheme or trust RAC to -
(a) carry out a stress-test, or
(b) cause a stress-test to be carried out,
in respect of the scheme or trust RAC concerned for the purposes of enabling the identification of deteriorating financial conditions in that scheme or trust RAC and to monitor how that deterioration is remedied.
(2) A notice under subsection (1) shall state -
(a) information relating to the stress-test that is to be carried out in respect of the scheme or trust RAC,
(b) having regard to the matters to be assessed under subsection (3) -
(i) one or more methodologies to be used in the stress-test,
(ii) different sets of economic circumstances, and
(iii) the reporting arrangement,
that are to be applied, by the trustees of the scheme or trust RAC in the stress-test, and