Buy-out and Risk Management

 

 Overview

 
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 pension scheme’s investment strategy on the company’s balance sheet and the cash cost, including the potential use of swaps and other investment products to manage risk and discussing the company’s view on the investment strategy with the trustees.

  • assessing longevity swaps – we have conducted detailed research into this nascent market and developed a market-leading bespoke longevity tool to help sponsors assess the exposure of their schemes to longevity risk and consider the effective price of entering into a longevity cash flow swap or longevity index hedge.

  • analysing and implementing liability reduction exercises – we have long experience of conducting enhanced transfer value exercises, exchange of pension increase exercises and early retirement exercises to generate optimum levels of liability and risk reduction.

  • analysing and executing a buy-out or buy-in – our specialist buy-out team has advised sponsors 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.

 

 Insights & views

 
    The Impact of Deflation on Occupational Pensions
    27 March 2015

    The Consumer Prices Index (CPI) was unchanged in the year to February 2015 (i.e. the 12 month rate was exactly 0.0%), a record low. With further falls in inflation later this year seeming a distinct possibility, we consider the impact of deflation on occupational pension schemes.

    Click here to view briefing note

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    Social Housing Pension Scheme (“SHPS”) – 2014 valuation and benefits review
    26 March 2015

    SHPS has recently written to participating employers to provide preliminary results of the 30 September 2014 valuation which, as expected, confirms a significant increase in contribution requirements. This note summarises these preliminary results and also provides details of the results of the employer consultation around future service defined benefit structures from 1 April 2016 and other considerations for SHPS employers.

    Click here to read the briefing note

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    Chancellor extends Flexiday freedoms and cuts lifetime allowance (again)
    18 March 2015

    ​In the last Budget of this Parliament, the Chancellor announced plans to extend the Flexiday   freedoms from April 2016 to individuals who have already purchased an annuity, by reforms intended to create a secondary annuity market. He also announced plans to cut the lifetime allowance from its current level of £1.25M to £1.0M.

    Read full news alert here

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    Issue 11: Flexiday - DB to DC Transfers
    17 March 2015

    ​It now seems a long time since the second note in our ‘Countdown to Flexiday’ series in which we discussed fears that defined benefit (DB) to defined contribution (DC) transfers would be banned. In this note, the eleventh in the series, we discuss the latest developments on DB to DC transfers and the implications for trustees and employers.

    Read full briefing note here

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    Briefing Note Contracting Out
    13 March 2015

    The new single tier state pension will be introduced on 6 April 2016, replacing the existing basic state pension and state second pension (S2P). At the same time, the option for defined benefit (DB) schemes to contract out of S2P will cease to exist. Employers with open contracted-out DB schemes will therefore need to decide how to respond to the abolition of contracting out. A new set of regulations provides one possible route for employers to amend their rules.

    View full briefing note here

     

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    Visit the Industry Insights page for news and views on the latest industry developments
 

 Events

 
    Trustee Training - Trustee Knowledge and Understanding (Intensive)
    15 April 2015
    This course addressed the knowledge and understanding requirements
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    Getting Ready for Your Next Pension Scheme Valuation
    21 May 2015
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    Trustee Training - Trustee Knowledge and Understanding (Intensive)
    15 September 2015
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    Getting Ready for Your Next Pension Scheme Valuation
    24 September 2015
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    PS Annual Pensions Conference 2015
    1 October 2015
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    Getting Ready for Your Next Pension Scheme Valuation
    26 November 2015
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    Trustee Training - Trustee Knowledge and Understanding (Intensive)
    3 December 2015
    Read more
    Visit the Events area for all forthcoming Punter Southall seminars, conferences and events
    Speak to us

    Speak direct to our specialists in this area
    Neil Lalley
    Head of Employer Services
    Or call us on
    020 3327 5000