Liability management

Actuarial advice

Liability management exercises, such as enhanced transfer values (ETV) for deferred members and pension increase exchange (PIE) for pensioners, have become increasingly common in recent years. However, a badly designed or implemented exercise will put your company at risk of financial loss, regulatory censure or reputational damage.

Of typically even more interest to employers is the possible introduction of new retirement options, for active or deferred members when they reach retirement. Usually these include giving retiring members a PIE option and, sometimes, an option to transfer their benefits out of the scheme.

At bac, having helped a range of companies look at ETV, PIE and retirement options, we recognise that these exercises can be of value to some but not all companies. That’s why we help companies to test their feasibility for their own circumstances at a reasonable and fixed cost.

If you decide to move ahead and implement a liability management exercise or some new retirement options, we can help you there too.

We have recently designed and implemented a PIE at retirement option for a FTSE 100 client. The project involved agreeing the following with the trustees:

  • the design of the PIE offer
  • the member communications
  • a bespoke online modeller for members, which compares a member’s benefits before and after the PIE offer.

We also supported the company to ensure the scheme’s administrators correctly implemented the new offer within the administration systems and procedures.

For a multinational client, we proposed a complete overhaul of the communications with members as they approach retirement, ensuring details of a member’s transfer value were made available. Additionally, we provided members with an online modeller to compare their scheme benefits with potential income levels if they were to take a transfer value.

You might also
be interested in...

Are you
looking for...

For a cost-effective and successful liability management exercise you need experienced project management, a well thought through offering and a strong member communication plan

Find out more ...

22 January 2021

In the news over the last week, the Pension Schemes Bill is at the final hurdle, automatic enrolment limits are reviewed, there is new research into trustee decision-making, the FCA sees signs of improvement in DB transfer advice and a full buy-in is completed.

Pensions Arena October 2020

This quarter’s Arena has a summary of our recent Pensions Perspective, “Endgame planning comes of age”, which looked at how long-term funding and investment plans are evolving and why companies are increasingly taking the lead in designing an endgame strategy. It also shows all the usual financial and investment analysis for the quarter ending 30 September 2020.

Endgame planning

Journey plans or glide paths may have been around for a long time but they’re at the heart of the Regulator’s proposed new funding code. In this Pensions Perspective, Leonard Bowman looks at how long-term funding and investment plans are evolving and explains why companies are increasingly taking the lead in designing an endgame strategy for their schemes.

Pensions Arena July 2020

This quarter’s Arena has a summary of our recent Pensions Perspective, “Emerging from lockdown”, which looked at how best to tackle the most common pension issues which companies are currently facing. It also shows all the usual financial and investment analysis for the quarter ending 30 June 2020.

Emerging from lockdown

As we keep hearing, we are living in unprecedented times. However, as we turn our attention to the future, what does the “new normal” mean for defined benefit pension schemes? In this Pensions Perspective, Leonard Bowman considers the most common pension issues that companies are facing and how best to ensure that the company approaches these on the front foot.