Recent changes in pension legislation have handed significant powers to trustees regarding the financial management of a company’s pension scheme. As a result companies need to be fully aware of the potential implications of trustee decisions and the impact they can have on the underlying finances of a business.
At Hymans Robertson we use detailed financial modelling and quantitative risk assessment tools to show the likely outcome of solutions proposed by trustees and their advisers in the context of current regulatory thinking. We can then advise and support boards in their negotiations with trustees regarding issues such as future funding arrangements, benefits and investment strategy.
We can also assess existing pension scheme arrangements and identify and evaluate potential options for change. This includes assessing the cost of individual benefits and the possibility of ‘free’ changes such as contracting-in and salary sacrifice.
Our focus is firmly on the implications of changes to the bottom line, which can only be accurately assessed through a rigorous evaluation of three core elements: funding, investment and the benefits policy.
Our services include the following:
- providing quick and cost effective diagnostic assessment of the funding position of the pension scheme
- reviewing existing benefit arrangements along with their cost implications
- assessing feasibility of possible benefit changes and their cost saving potentials
- determining optimal combination of benefit changes to gain control over pension liabilities
- reviewing existing investment arrangements of the pension scheme along with their risk implications
- determining the optimal investment strategy for the scheme from the company's perspective
- evaluating de-risking options and dynamic strategies for "banking" any investment gains
- setting defendable actuarial assumptions for accounting purposes supported by market data and benchmarking
- reviewing actuarial advice to the trustee and advising on company response or proposals supporting negotiation with the trustee and/or Pensions Regulator on actuarial assumptions, funding and/or recovery plan
- assessing implications of mergers, acquisitions and corporate restructuring along with expected trustee reactions
- supporting negotiating with the trustee and/or Pensions Regulator in relation to corporate transactions or covenant assessments
- evaluating possible buyout solutions and providing cost benefit assessment
- assessing financial implications of changes in pensions legislation, regulations or accounting
- determining an optimal pension strategy for private equity investor to avoid pension issues hindering any exist opportunities