The Pensions Act 2004 created the Pensions Regulator and the Pension Protection Fund. The former told trustees to begin to think like any other unsecured company creditor – in other words like a banker. The latter was required to base 80% of its levy on a risk basis of assessment. At least initially, risk will be measured by the scale of any deficit and a company’s creditworthiness. Credit risk mitigation techniques include funding, document enhancement, third-party financial support and the use of market instruments.
