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

 
    Countdown to Flexiday Briefing Note Issue 8 - DC trusts - implement or facilitate?
    9 December 2014

    Amidst continued media excitement about the new flexibilities, trustees of defined contribution (DC) schemes and sections now need to decide exactly how they will implement the new flexibilities.

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    Autumn Statement Pensions Update
    4 December 2014
    The Chancellor’s Autumn Statement was light on pensions details. This will have come as a welcome relief to most of those involved in pension schemes, who are still reeling from the implications of the Budget announcement and the seemingly endless series of amendments to the two pensions Bills before Parliament.
     
    The only significant new announcement was that beneficiaries of people who die under the age of 75 with a joint life or guaranteed term annuity will be able to receive any future payments from such policies tax-free. This will only apply where no payments have been made to beneficiaries before Flexiday (6 April 2015). The tax rules will also be changed to allow joint life annuities to be paid to any beneficiary. Where the member was over 75 at death, the beneficiary will pay income tax at their marginal rate, or 45% if the funds are taken as a lump sum payment (marginal rate from 2016/17).
     
    These changes will largely align the tax treatment of annuities on death with the treatment already proposed for drawdown and lump sums. This does not appear to apply to scheme pensions from defined benefit schemes, although we await further details of the proposals.
     
    The Government has also confirmed that it will not make changes to the age limit of 75 at which tax relief can be claimed on pension contributions.
     
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    DC Schemes: race for the finishing line
    2 December 2014

    Trustees of defined contribution schemes and sections have never been so busy!   6 April 2015 is fast approaching, when the new legal governance requirements and default fund charge cap come into force. 

     

     



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    De-risking Bulletin Impact of the budget changes
    27 November 2014

    One of the most talked-about topics in pensions this year has been the announcement in the budget enabling people to take more cash from defined contribution (DC) pension schemes.

     



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    Corporate Bulletin Quarter 3 2014
    10 October 2014
    Welcome to this new edition of our quarterly bulletin aimed at defined benefit (DB) sponsors.We provide an overview of market conditions and the range of accounting assumptions sponsors may wish to use for their interim or annual disclosures at 30 September 2014 alongside market news regarding pension buy-outs and de-risking, and an update on PPF issues.
     


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

 Events

 
    Public Sector Outsourcing: Pensions on Local Authority Contracts
    15 January 2015
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    Charities and Non Profit Sector: Addressing the Pensions Challenge in 2015
    29 January 2015
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    Getting Ready for Your Next Pension Scheme Valuation
    11 February 2015
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    Trustee Training - Trustee Knowledge and Understanding (Intensive)
    18 February 2015
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    Member Communications: Will you be ready for 'Flexiday'
    24 February 2015
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    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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    PS Annual Pensions Conference 2015
    1 October 2015
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    Getting Ready for Your Next Pension Scheme Valuation
    26 November 2015
    Read more
    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