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

 
    Stormy waters ahead for pensions?
    6 September 2016

    ​Whilst we may have seen fewer thunderstorms this year than in previous summers, there has been no shortage of developments which could signal stormy weather ahead for pensions, including a Cabinet reshuffle, recent high-profile developments relating to the British Steel and BHS pension schemes and the prospect of a new Pensions Bill. All this takes place in the context of the vote to leave the European Union, which we have already considered in our briefing note ‘What does Brexit mean for pension schemes?’.

    Read full pensions bulletin here

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    21st century trusteeship and governance
    24 August 2016

    ​In July 2016, the Pensions Regulator (TPR) published a discussion paper on how trustee boards can meet the challenge of pension scheme governance in the changing pensions and economic landscape of the 21st century. TPR is seeking views by 9 September 2016 on a number of topics, including whether there should be minimum qualifications for professional trustees or Chairs of trustees and whether Chairs should be required to produce a governance statement for defined benefit (DB) schemes.

    Read full briefing note here

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    What does Brexit mean for pension schemes?
    26 July 2016

    On 23 June 2016, the UK voted to leave the EU, but it remains unclear when our exit (otherwise known as ‘Brexit’) might be triggered and on what terms. In the face of such uncertainty, trustees and sponsors of pension schemes should be considering the short-term effects on their funding and planning for the possible longer-term implications of Brexit.

    Read full briefing note here

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    What options are there for managing the DC governance burden?
    20 July 2016

    ​In November 2013 the Regulator introduced a Code of Practice (Code) for the governance and administration of trust based DC schemes. Legislation came into force on 6 April 2015 introducing further requirements, including a mandatory annual Chair’s statement. A new update Code, together with accompanying guidance, is to come into force on 28 July. This note explores the options available to trustees and sponsors looking to manage their DC governance burden.

    Read full briefing note here

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    Deficits of UK DB schemes reach all-time high
    6 July 2016

    Brexit impacts will be evident on companies’ balance sheets at 30 June 2016, with historically low bond yields leading to lower discount rates which in turn increase the value of DB pension liabilities. We take a look at what Brexit means for sponsors of DB pension schemes, and in particular the immediate impact on accounting assumptions. We also cover the pensions problems currently being experienced by BHS and British Steel, as well as the usual updates on PPF levies and the buy-out market.

    Read full bulletin here

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

 Events

 
    Punter Southall Annual Pensions Conference 2016
    29 September 2016
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    Trustee Knowledge & Understanding (TKU) Course **FULLY BOOKED**
    6 October 2016
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    Trustee Knowledge & Understanding (TKU) Course
    14 October 2016
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    Maturing Gracefully: End Game Planning for Pension Schemes
    1 November 2016
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    Pension Scheme Valuations in a Post-Brexit World
    10 November 2016
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    Pension Scheme Valuations in a Post-Brexit World
    24 November 2016
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    Pension Scheme Valuations in a Post-Brexit World
    26 January 2017
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    Trustee Knowledge & Understanding (TKU) Course
    8 February 2017
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    Pension Scheme Valuations in a Post-Brexit World
    16 March 2017
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    Trustee Knowledge & Understanding (TKU) Course
    14 June 2017
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    Trustee Knowledge & Understanding (TKU) Course
    7 September 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