Throughout our trusteeship of Sanyo Europe’s UK pension scheme we built up close working relationships of trust and confidence with our company contacts.
These relationships were key to the success of the two projects which define our period of trusteeship: major changes to the scheme’s investment strategy followed by a full buyout of the scheme’s liabilities.
Flexibility in the investment strategy
The first major project was a flexible investment approach which was proposed by Entrust to address the employer’s two principal and competing concerns:
- a desire not to be paying too high a rate of deficit repair contributions; and
- a wish to move away from growth seeking assets to reduce risk.
Using liability driven investments (LDI), we oversaw a strategy which closely matched the scheme’s liabilities whilst at the same time allowed an allocation to growth seeking assets. A flexible schedule of contributions was then agreed on an alternative basis whereby the employer could choose the date at which it wanted to switch to the new LDI strategy and decrease its deficit repair contributions accordingly.
Full scheme buyout
Our second major project was the full buyout of all the scheme’s liabilities with an insurance company; a transaction worth approximately £50 million. The project was driven by challenging timescales based on the Japanese parent company’s reporting requirements.
We project managed the significant input from our legal, actuarial, covenant and administration advisers and liaised closely with the employer and its advisers to ensure that the first stage buy in of all liabilities was completed inside an eleven week period, thereby safeguarding the full pension benefits of all the scheme’s members.