The expression “reasonable certainty” is used in the Pensions Act 2004 and the Recovery Plan section of the DB funding code – it is also used more than 50 times in the updated guidance, but is not defined.

If you think how this works will be explained in the Pension Regulator’s updated guidance, think again.

The guidance intentionally does not define how to assess reasonable certainty, “as this will vary in accordance with the specific circumstances of the scheme and employer” and “will require professional judgement and expertise”.

It also states “the ability to look forward with reasonable certainty beyond a set point to be a limiting factor” and “for certain schemes, covenant longevity may be more subjective”.

The guidance also confusingly refers to “reasonable confidence”, “reasonable expectations” and “scenarios which have a reasonable probability of occurring” in assessing reasonable certainty.

There is no case law in the UK on what “reasonable certainty” means, nor is it a phrase which appears in other UK statutes. As it is thus open to a range of interpretations, it would helpful if the Pension Regulator provides a clear definition on how to assess it.