We lead defined benefit pension schemes through buy-in, buy-out and wind-up projects. Our role spans the full transaction lifecycle, from early-stage planning and funding strategy through to the final transfer of risk to an insurer and the orderly closure of the scheme.
We have advised on buy-in, buy-out and wind-up transactions across the small-to-mid size defined benefit market. Our most recent six completed buy-in and buy-out projects had an average scheme size of £22m. Our broader advisory experience extends to schemes of approximately £200m for global sponsors. We have experience of completing risk settlement transactions with all key providers in the market including Aviva, Just, PIC, Royal London, Blumont, Canada Life and L&G.
How do we help?
We take the trustee role across the full endgame lifecycle, whether as sole trustee, chair of trustees or co-trustee. Our work covers four core areas.
1. Buy-out preparation and implementation
We invest in the scheme preparation and readiness work that determines pricing and timing. This includes preparatory data work that makes a scheme attractive to insurers in a saturated market, structured engagement with the insurance market, and disciplined coordination of the parallel workstreams that a buy-in or buy-out requires. On our active projects we run several workstreams in parallel to reduce project timescales, with careful coordination to ensure interactions between workstreams are anticipated and planned for. Our experience includes the £70m buy-in with Aviva for the Federated Flexiplan No.1 scheme and a £50m insurance transaction completed under accounting deadline pressure.
2. Funding strategy
We work with sponsors to design funding strategies that align with the desired timeframe to risk settlement. This includes additional funding objectives that take a scheme beyond a technical provisions basis to a fully funded-on-buy-out basis, and structures such as Flexible Apportionment Arrangements and Security Arrangements where additional support can benefit scheme journey plans. This work has helped sponsors reduce annual scheme contributions and accelerate the funding journey to buy-out, in one recent engagement reaching the insurance transaction two years ahead of the scheme’s original plan.
3. Investment strategy through to endgame
Our team includes investment specialists who can bring benefits and insights during investment strategy, journey planning and liability hedging discussions. This experience was vital during the 2022 mini budget, recapitalising LDI funds where needed and reviewing manager performance through the stress period to protect scheme funding positions. We work alongside sponsors and advisers to ensure the investment strategy supports the scheme’s funding journey and the agreed endgame timeframe.
4. Group buy-out projects
For sponsors with multiple schemes, or for multiple schemes within the same corporate group, we coordinate buy-out projects across all schemes within the group. This involves managing the work across legal, administration and advisory firms, and presenting the schemes to the insurance market in the most attractive form, either as individual schemes or as a group whose combined scale can attract greater insurer interest. Recent group work has included a buy-out project across two schemes sponsored by a major UK high street bank’s investment division. One of those schemes completed its insurance transaction and moved into wind-up; the other moved into the buy-out phase.
Who do we help?
We help any organisation that has a defined benefit pension scheme and is considering, planning or actively pursuing the long-term settlement of its members’ benefits. We help schemes that:
- have assets in the tens of millions, with our broader experience extending to schemes of approximately £200m for global sponsors;
- are at any stage, from initial endgame planning through to active buy-in or buy-out transactions; or
- need a trustee with hands-on experience of running the full project alongside the sponsor’s other advisers or co-trustees.