Continuity strategy: overview

Overview

CDC code in force: 1 August 2022

We must be satisfied that the scheme has an adequate continuity strategy^CT1. A continuity strategy is a document that must be prepared by the trustees^CT2, setting out how members' interests will be protected after a triggering event. Trustees must send us the continuity strategy as part of the application for authorisation, within three months after it is revised, and whenever we ask for it^CT3. It must give details about all matters set out in regulations^CT4 and include a statement of all levels of administration charges^CT5, which may be presented as a separate document.

We do not expect the continuity strategy to be exhaustively detailed. Using the headings below as a guide, it should provide the principles and framework for identifying key actions, their owners and the timings of decisions required to deal with a triggering event. It should be sufficiently comprehensive for trustees to be able to quickly resolve which continuity option to select and be in a position to provide a template for working up the detail of an implementation strategy within 28 days of the triggering event occurring or becoming final.

Trustees should think of the continuity strategy as setting out a business case to explain what needs to be done and how, and the likely cost of dealing with a triggering event, while the implementation strategy is a fully costed operational business plan to manage a triggering event once it has occurred.

The continuity strategy should be flexible enough to allow the trustees to tailor their approach in response to a specific triggering event. It should be periodically reviewed and if appropriate revised to adjust to changing circumstances. It should also give sufficient detail to allow calculation of the costs identified for the costs, assets and liquidity plan (CALP).

In addition to meeting the requirements set out in the Regulations, trustees should be clear about how they will:

• be adequately prepared in case of a triggering event occurring
• continue to operate the scheme during a triggering event period
• decide which continuity option to pursue
• meet the costs of dealing with a triggering event
• communicate with members

Legal references

^CT1 Section 9(3)(f) of the Act

^CT2 Section 17(2) of the Act

^CT3 Section 17(7) of the Act

^CT4 Section 17(5) of the Act and Regulation 15(1) of the Regulations

^CT5 Section 17(3) of the Act

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