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 ...

17 January 2020

In the news this week, the consultation on the RPI is delayed until March, the first DB funding code consultation is also expected in March, there is speculation about the Treasury’s intentions towards the tapered annual allowance, HMRC announces a further delay to the final GMP data cuts and Dominic Chappell is ordered to pay £9.5 million.

10 January 2020

In the news since 20 December 2019, the Pension Schemes Bill returns, the FCA takes action against bad DB transfer advice, the Chancellor confirms the Budget date and two pension schemes win a US class action.

Pensions Arena October 2019

Despite the very different circumstances facing individual companies, bac‘s autumn 2019 survey reveals a surprisingly consistent picture of the actions which companies are finding most attractive to manage their DB and DC pension arrangements.

DB Governance Case Studies

As DB liabilities have become legacy issues to be managed, governance has become the umbrella term for a broad range of risk management tools. In this publication, we look at the DB governance solutions we have helped our clients to implement.

A match made in heaven?

As pension trustees and sponsors get serious about good governance, a key question is whether technology can play a meaningful role or is simply an expensive addition that looks good but adds little value?