Moody’s Analytics today announced that Clara Pensions will be using the PFaroe™ DB pension risk modelling technology to model and manage the liabilities and risks it faces as part of Clara’s ‘Member-first’ approach. Clara takes members on a safer journey to buyout after transacting with the trustees and sponsors of their pension plan.

Clara is the first and so far the only DB pension consolidator to successfully complete the Pensions Regulator’s assessment process. Its model serves as a ‘bridge to buyout’ for pension plans and their members.

The PFaroe DB solution is aiding Clara in undertaking its first transactions. Clara will use the PFaroe DB system to model future risk scenarios for liabilities and assets both within the Clara Pension Trust and its capital buffers (financial reserves). In addition to having its own pension modelling capabilities, Clara’s fiduciary manager, Kempen Capital Management, also uses PFaroe DB, enabling further efficiencies around information transfer and reporting.

“In order to fully assess the risks which our members and our capital are exposed to, we need to understand how liabilities and assets could change based on a range of future scenarios,” said Luke Stratford-Higton, Chief Pricing Officer at Clara Pensions. “The PFaroe technology will help greatly in our ability to do so and is another important step in preparing Clara to welcome its first members and create safer pensions.”

Nikesh Patel, Head of Client Solutions UK at Kempen, added: “With the information flows between Kempen and Clara Pensions already strong, using the same product gives us further commonality. There is now a single clear view of the liability and asset modelling from Clara right the way through to Kempen and vice versa.”

Simon Robinson, Director, Product Management, at Moody’s Analytics, concluded: “We are very excited to be working with Clara Pensions to help support their innovative offering. Our relationship reinforces the value the PFaroe DB solution has to offer in supporting pension plans to deliver the best possible outcomes for plans’ members and how our mutual clients can benefit from both using PFaroe DB.”