We have been advising trustees of defined benefit schemes for many years.
Over this period, we have developed solutions that can help trustees to manage these challenges.
Trustees will be well aware of the escalating costs associated with defined benefit schemes.
The chart below, prepared for The Pensions Regulator, shows the average cost per member per scheme.
Our consultants are well placed to offer a scheme review which will help benchmark your scheme against your peer group. It provides an independent review of the core elements of your scheme:
Investments & Advisers
This ‘no obligation’ review is undertaken by one of our team. Third parties such as actuaries and investment managers may be used to assist in the process. All data will be treated in the strictest confidence.
Working with the information from the scheme review we can help the trustees create a strategic plan to help de risk the scheme.
Why de-risk your scheme?
The cost to employers of operating a DB pension scheme has risen dramatically and for many schemes we are now at the point where the cost of de-risking will almost certainly be less than the long-term cost of doing nothing.
This may therefore be the moment to look seriously at removing or managing the risks in your scheme. The reasons are compelling:
What are the solutions to the problem?
We can help Employers and trustees to put in place a realistic strategy for dealing with their exposure to DB pension scheme risks. This strategy needs to consider:
The short, medium and long-term funding objectives for the scheme
Many trustees have experienced the frustrations around developing a robust and effective investment plan. We can help trustees develop a long-term strategy that takes into account the following factors:
Trustees need to work with the employer when deciding the investment strategy, as it will influence the amount and timing of contributions they may need to pay to the scheme.
Taking risk may bring rewards but you should understand the risks being run and manage them appropriately. We can help trustees assess and review their attitude to risk.
Trustees should consider how different strategies may affect the scheme’s funding position, the employer’s plans for sustainable growth and the employer covenant.
We can also help to diversify a scheme’s investments, e.g. concentrating investments in a similar industry to the employer will increase the risk of underperforming if there’s a downturn in that industry.
Trusts are not regulated by the Financial Conduct Authority.