The Pensions Research Accountants Group (PRAG) has shared a new paper looking at the required accounting treatment of the various financial sustainability models found across the UK’s defined contribution (DC) master trusts.

PRAG Master Trust Working Group chair, Cathy Allen, said: “The PRAG DC Master Trust working party has been considering the required accounting treatment of the various financial sustainability models that are to be found across the UK’s DC master trusts and have published this paper to support them."

The paper, Accounting for the Financial Stability Requirements for a Master Trust, was also published alongside an update to the guidance on Pension Scheme Task Force on Climate-related Financial Disclosures (TCFD) Governance and Reporting Requirements.

Replacing guidance last issued in May 2023, PRAG Environmental, Social and Governance (ESG) Working Group acting chair, Peter Cox, explained that the guide was updated to include a number of practical updates for pension funds to help understand their TCFD-related requirements, following the latest sets of market feedback and observations.

"We will continue to monitor the broader sustainable investing and regulatory space that remains dynamic as it matures further," he stated.

Further updates are also expected from the PRAG more broadly, as the group confirmed that a forthcoming consultation document will be issued in early 2025 for revisions to its flagship publication the Statement of Recommended Practice, Financial Reports of Pension Schemes.

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