Buy-out and Risk Management

We can help you with:

• identifying the key risks – schemes are typically exposed to risks such as sponsor risk, investment risk, inflation risk and longevity risk.  Understanding the extent of the risk currently being taken in each of these areas is a fundamental first step to determining an appropriate risk budget.
  
  
• managing investment risk – understanding the impact of the investment strategy on the volatility and future expected funding position of your pension scheme, including the potential use of swaps and other investment products to manage risk.
  
  
• analysing and executing a buy-out or buy-in – our specialist buy-out team has advised and managed dozens of pension schemes through a wide variety of buy-in and buy-out processes since 1999, focussing on meeting our clients’ specific needs in a timely and cost-efficient manner.
  
  
• assessing longevity swaps – we have conducted detailed research into this nascent market and developed a market-leading bespoke longevity tool to help schemes assess their exposure to longevity risk and consider the effective price of entering into a longevity cash flow swap or longevity index hedge.
  
  
• establishing trigger points – allowing a scheme to identify the right time to implement a risk management solution. The success of risk management solutions are affected by the timing of their implementation. We can help identify key events and optimal timings that should trigger the undertaking of risk management solutions. This could be achieved through the use of an online daily valuation tracker tool which monitors the progression of a scheme’s  funding position.
  
  
• covenant advisory service - this is an area  where we can provide specialist services to assist pension scheme trustees in assessing and monitoring the strength of the employer covenant. Click here to learn more about our covenant advice service for trustees.