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Risk Reduction

We work with employers and trustees to explore and implement options to restructure pension schemes and reduce the risks posed by, for example, pension deficits in defined benefit schemes through liability management exercises and other one-off projects. 

These include:

  • closing schemes to accrual and/or new members
  • capping pension increases or pensionable salary
  • changing benefit design (such as reducing the accrual rate) for some or all members
  • changing actuarial factors and/or the measure of price inflation used in calculating or increasing benefits
  • advising on the employer debt regime and apportionment of liabilities on the exit of an employer
  • advising on incentive exercises such as the option to take an enhanced transfer value or to give up non-statutory pension increases and compliance with the Incentive Exercises Monitoring Board’s code of good practice for such exercises
  • drafting and advising on contingent assets (such as parent company guarantees and charges over assets) for funding purposes and to reduce the Pension Protection Fund levy

In connection with such exercises and scheme amendments, we can help identify any restrictions which may exist in the scheme documents, members’ contractual rights and any statutory restrictions and requirements for consultation.

 

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