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

 
    Pension Protection Levies: Proposals for 2018/19 to 2020/21
    18 May 2017
    On 23 March 2017, the Board of the Pension Protection Fund (PPF) consulted on proposed changes to the levy calculation from 2018/19 to 2020/21. The main proposals relate to the insolvency scoring with the aim of improving its predictability. This includes the use of credit ratings, industry-specific scorecards for financial institutions, a reallocation of sponsors to scorecards and a possible move away from the 12-month averaging of insolvency scores.
     
     
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    Is the Pensions Regulator getting tough on scheme funding?
    16 May 2017

    ​The Pensions Regulator (TPR) has issued its annual funding statement aimed at trustees and employers undertaking valuations with effective dates between 22 September 2016 and 21 September 2017 (2017 valuations). Whilst many of the themes in the statement are familiar from previous funding statements, TPR appears to be taking a stronger position on some issues than it has done previously.

    Read full news alert here

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    CMI 2016… confirmation of a new trend?
    10 May 2017

    The Continuous Mortality Investigation (CMI) released the 2016 version of their model for projecting future improvements in longevity, CMI 2016, in March 2017. This version of the model allows for actual deaths up to the end of 2016 and projects lower future improvements in longevity than the 2015 version of the model.

    Read full briefing note here

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    Has the cut in the money purchase annual allowance been washed away?
    2 May 2017

    As a result of Theresa May’s call for an early general election being approved by the House of Commons on 19 April 2017, Parliament will be dissolved at one minute past midnight on 3 May 2017. 

    Read full news alert here

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    Discounting disconnect and limited longevity?
    6 April 2017

    Does the current low level of gilt yields create a false funding burden for sponsoring employers? Has the pace of increases in life expectancy finally tailed off? We seek to help sponsoring employers understand the issues and look at alternative approaches for pension scheme funding.

    Read full bulletin here

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

 Events

 
    Exploring Flexibilities in Discount Rates
    8 June 2017
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    Trustee Knowledge & Understanding (TKU) Course
    14 June 2017
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    Exploring Flexibilities in Discount Rates
    15 June 2017
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    Exploring Flexibilities in Discount Rates
    20 June 2017
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    Pension Training: LGPS Training for Admission Bodies
    20 June 2017
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    Investment Masterclass: Alternative Ways of Managing Risk
    22 June 2017
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    Exploring Flexibilities in Discount Rates
    27 June 2017
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    The Railways Pension Scheme - Employer Discussion on the 31 December 2016 Valuation
    29 June 2017
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    Exploring Flexibilities in Discount Rates
    13 July 2017
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    Trustee Knowledge & Understanding (TKU) Course
    7 September 2017
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    Investment Event: Practical Advice for DB Pension Schemes
    12 September 2017
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    Annual Pensions Conference 2017
    28 September 2017
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    Investment Event: Practical Advice for DB Pension Schemes
    5 October 2017
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    Trustee Knowledge & Understanding (TKU) Course
    8 November 2017
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    Pension Scheme Valuations: "The Big Opportunity” Valuation Masterclass
    9 November 2017
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    Visit the Events area for all forthcoming Punter Southall seminars, conferences and events
    Speak to us

    Speak direct to our specialists in this area
    Craig Wootton
    Principal
    Or call us on
    020 3327 5000