Large one-off projects can create significant resource pressures and/or expose technical gaps within a company’s pensions team. Of course incumbent advisers can help with the gap, but at a price. If the client does not carefully manage its resource and technical needs, the cost of a large one-off project can quickly spiral. bac can help in a variety of ways.
A multi-national company wanted to restructure its UK operations to create a new employer, with its own DC pension plan, from what was previously a division of its main UK employer. This involved a TUPE transfer of the relevant employees and the setting up of a DC master trust to provide their future pension benefits. And the project needed to be completed within three months! With the UK pensions manager fully engaged on other work, we were brought in to implement the setting up of the master trust and to project manage all aspects of the pension transfer. This included drafting pension announcements to members and delivering onsite presentations. The outcome was that all eligible employees decided to join the master trust on its commencement date (there was no one left to be automatically enrolled) and many chose to increase their contribution rate in order to benefit from higher matching company contributions. Our client contacts were very happy with the support they received.
Another client lost its pension director shortly before the company embarked on a large scale de-risking and buy-in exercise. Not wishing to bring in someone new mid-project, we were appointed to act as the outsourced pension director to oversee the other advisers, project manage and report back to the board at the key milestones. Once the project was complete a new pension director was appointed.
In the news this week, the pensions world continues to be dominated by the impact of the Covid-19 pandemic, with the Regulator publishing more guidance for employers, the FCA delaying the implementation of its drawdown investment pathways and two household name companies deferring (or missing) their deficit recovery contributions.
Over the autumn of 2019, BAC conducted an extensive survey of the actions which companies are taking to manage their defined benefit (DB) and defined contribution (DC) pension arrangements.
2019 marked 50 years since Neil Armstrong walked on the moon and this was obviously on the Queen’s mind in her Christmas message as she talked about a bumpy year but one with small steps of progress as well. In terms of pensions, it also felt like a year of small steps and occasional bumps. In this quarter’s Arena, we take a positive look back at 2019, as well as looking forward to some expected pension developments over 2020.
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.
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.