Case Studies

Pensions Advisory and Trustee Services

We are proud to highlight our recent success stories.

Service – Trusteeship – affordability constraint

We take our duty of acting in members best interests seriously and look to do this whilst supporting sponsors.

We worked with the sponsor of a Scheme where the scheme was materially larger than the sponsor and also poorly funded.  The sponsor was breaking even but recent efforts at growing the business and improving profitability had not gone to plan.  The sponsor wanted to restructure and to improve prospects via a planned redundancy programme.  However, over the short-term, cashflow constraints meant that both redundancy payments and contributions to the pension scheme would not be affordable.

We completed our due diligence, including a proportionate review of the business plan and, as Trustees, were able to agree a temporary suspension of contributions in exchange for additional security for the Scheme.  This enabled the business to complete it’s restructure such that the future viability and prospects were improved.

We kept the Pensions Regulator fully involved so that it was fully aware of the situation and would not penalise the scheme or sponsor for a breach of the previously agreed terms.

The sponsor is now more profitable than previously and the long-term viability of the scheme has improved.

Advisory (DB) – Proportionate advice for smaller schemes post 2015 ‘Pensions Freedoms’

A practical approach to informing deferred members of their options under the scheme was proposed and agreed by the Trustees, with the aim of improving member engagement as well as the funding position of the scheme in a cost effective manner.

The Issues

We had been appointed as Scheme Actuary to a scheme with 1,000 members, of which 400 were deferred pensioner members and 300 of these were currently over age 55. The scheme had closed to accrual 10 years earlier. The Trustees were keen to increase engagement with the scheme membership. Affordability for liability management exercises for the Company was limited. A small funding deficit was present and there was a material funding gap from being able to buy-out the scheme with an insurance company – the Trustees and the Company were both keen to reduce both of these. The scheme was a legacy scheme and some data issues had persisted for a number of years, without being proactively addressed.

Proposed approach

We proposed the issuing of a benefit statement to the deferred members of the scheme, with the statement including the current individual member’s transfer value alongside details of the pension benefits and the options available to them.

We felt the reasons the Trustees should take this approach were as follows:

  • The introduction of ‘Pensions Freedoms’ in 2015 had provided greater choice for members with regards to their pension benefit options and the deferred statement would summarise the options available for members within the scheme;
  • The statement would re-establish the pro-active engagement and communication channels with the scheme membership;
  • The fees associated with the production of the benefit statements were a fraction of the cost of a liability management exercise, such as an Enhanced Transfer Value exercise or Flexible Retirement Options exercise.

The Trustees and the Company agreed to the production and issuing of the deferred statements. Following discussions, it was agreed to:

  • Issue a benefit statement to all deferred members over age 55 at the current time;
  • Going forward, issue a benefit statement to deferred members as they reach age 55;


There was a very good response from the members to the statement they received. 72 members (almost 25% of the membership) contacted the scheme administrators with a variety of requests, including:

  • Request to transfer;
  • Request to early retire;
  • Request to take the benefits as a lump sum as they were below the trivial commutation limits;
  • Notification of the death of a member;
  • Notification of a change in address;
  • Clarification of data items such as the date of joining and date of leaving.

The scheme’s funding position improved such that the scheme moved into a small funding surplus and the buy-out deficit reduced materially.

A number of the previously persistent data issues were resolved, improving the common data score above the Pensions Regulator’s stated target as well as improving the conditional data score.

Following the positive feedback received on the benefit statements from the membership as well as the funding and data improvements, the Trustees have decided to continue the engagement with the membership by issuing updated statements every 3 years.

Advisory (DC) – DC Scheme lifestyling review

Pro-active yet proportionate advice and engagement with Scheme members to review and update lifestyling options in the DC Scheme following the introduction of Pensions Freedoms.


We advised a defined contribution (DC) scheme with 400 members and assets of £20 million. The Scheme had a ‘traditional’ benefit structure and, in particular, the default lifestyling approach offered by the scheme was targeting 25% cash and 75% annuity at retirement.

Members and the employer were highly engaged with the Scheme via a member focus group. Since Pension Freedoms became available, the members had increasingly raised interest in drawdown options with the Trustees of the Scheme.

As a result of the consistent feedback from members, the Trustees asked Darren to provide options to them on the potential benefit design changes and the way forward.


We provided recommendations for discussion covering areas such as:

  • Should an additional drawdown lifestyling strategy be introduced to the Scheme?
  • Proportion of cash that should be included within the additional drawdown lifestyling strategy.
  • Which lifestyling strategy should be the default for members if no active choice is made by the member?
  • Length of lifestyling period
  • Options around communicating with the membership, including announcements to members, updated Scheme literature and member workshops.

Once decisions were made at the Trustees’ meeting and agreed with the Company, the proposals were presented and discussed at the member focus group. Feedback from the member focus group was also incorporated into the agreed roll-out of the new lifestyle strategy.


Over half of Scheme members have opted for the newly introduced drawdown lifestyling strategy and the communication channels adopted for sharing the details of the changes resulted in positive feedback and engagement from the Scheme members. Increased engagement, of course, means that members now value this benefit more than previously.

Advisory (DB) – Efficient and Effective Actuarial Valuation

Clear communication with all parties, careful planning throughout the process and pragmatism are, in our view, key to an efficient actuarial valuation process.


We were appointed as Scheme Actuary to the Trustees of a 1,500 member UK DB scheme. The sponsor was an international manufacturing firm not headquartered in the UK. The Company had informed the Trustees that the current level of contributions was at the limit of affordability. This was supported by independent covenant advice received by the Trustees. The Trustee board had recently seen a number of changes and it was the first actuarial valuation process for the majority of the Trustees. Under the previous Scheme Actuary, the Pensions Regulator has raised a number of concerns with the Trustees over the actuarial valuation approach at the previous valuation.


Prior to the effective date of the actuarial valuation, we provided a training session to the Trustee board covering the actuarial valuation process and the responsibilities of the Trustees.

Initial actuarial valuation results were prepared in line with the assumptions agreed at the previous valuation. Advice was also provided on adjustments to the existing assumptions to take account of:

  • More up-to-date information available on mortality;
  • Long-term inflation expectations; and
  • Long-term expected returns on assets (following a change to the scheme’s investment strategy).

Valuation results were presented based on market conditions as at the valuation date and also based on current market conditions in order to illustrate the impact of significant changes since the valuation date which had improved the scheme’s funding position.

The initial results presentation was provided to the Trustees and a representative of the Company. The Trustees and the Company raised the key issues from their perspectives at the outset. The Trustees were keen to ensure the agreement reached would satisfy regulatory requirements and the underlying risks of the approach ultimately adopted were understood. The Company were keen to ensure that a reasonable margin for prudence was adopted in determining the liabilities, that the length of the Recovery Plan was kept to a reasonable level and, if possible, not increased materially from that agreed at the previous valuation.

We considered the impact of varying key assumptions within reasonable ranges. Particular emphasis was placed on considering the mortality assumptions, the cash commutation assumptions and the assumptions adopted to determine the Recovery Plan. The result of those discussions was that adjustments were made to:

  • The mortality assumptions – to reflect the characteristics of the scheme’s membership;
  • The cash commutation assumptions – to levels supportable by actual experience: and
  • The investment return assumed within the Recovery Plan – to levels supportable by the agreed long-term investment strategy of the scheme.

The adjustments were agreed by both the Trustees and the Company. It was also agreed that allowance for current market conditions would be made in determining the Recovery Plan.

Indicative results on the agreed assumptions were communicated at the meeting and confirmed in writing following the meeting. The contribution requirement for the Company remained unchanged and the Recovery Plan reduced by one year (compared to that agreed at the previous actuarial valuation).

The final advice report, actuarial valuation certificates and submission to the Pensions Regulator were completed within 3 weeks of the meeting with the Trustees and Company.

After an initial query on the investment strategy, the Pensions Regulator subsequently confirmed to the Trustees that no further information was required on the actuarial valuation process.


The Trustees and Company were very pleased with the actuarial valuation process and the outcome. We were complimented by both the Trustees and the Company for the collaborative, efficient and pragmatic approach he took to the process. The efficient approach of face-to-face discussions between the Trustees and the Company (rather than formal written correspondence between the parties) was particularly constructive. 

Service – Trusteeship – scheme wind-up

The ultimate goal for almost all sponsors and trustees is to wind-up their pension scheme and this is often via the purchase of a policy with an insurance company.  As this outcome provides the best protection, in our view, this goal is worth pursuing where possible.

The sponsor of a scheme which was assessed to have enough money to secure all members’ benefits with an insurance company wanted to enter a solvent liquidation ahead of actually securing the benefits so that the Directors could access their capital.

This could have created a high risk situation due the fact that the cost of securing benefits can be very different to the initial actuarial assessment.  In order to facilitate the Directors requirements but also protect members, we worked closely with the sponsor, the actuary, the legal adviser and the insolvency practitioner to put in place:

  1. A suitable reserve to be held back from distribution in the event that the costs were higher than anticipated.
  2. An indemnity which would protect members in the event that the costs overran even the reserve.

The process went smoothly and the outcome was that member’s benefits have now been secured with an insurance company and the scheme has been wound-up.