Case study - delivering solutions to a client with multiple pension schemes

Background

Our client is an American-owned business, which, over the years, has acquired a number of UK companies in the industrial sector.

Buck Consultants previously advised one of the five UK schemes (with funds totalling around £280 million), which all employed different advisers. The client and the individual trustee bodies concluded that this was an inefficient way of operating the schemes, as it led to duplication of advice, fees and client management time, potentially leading to inconsistent conclusions on common issues.

A joint body, representing each set of trustees, received presentations from the advisers involved in the separate schemes and, subsequently, Buck Consultants was appointed to provide actuarial, administration and consultancy services to all the schemes. The trustees of each scheme approved the appointment, having been convinced that our ideas to manage the schemes individually but cost-effectively, utilising economies of scale, best met their objectives.

Approach

• Each scheme appointed a common Scheme Actuary and where practicable a common approach is taken to funding.
• Joint trustee meetings take place to consider common issues (e.g. the Pensions and Finance Acts), to avoid repetition of advice.
• Where tenable, common approaches were introduced on operational matters.
• Economies were sought by broking risk benefits together, rather than separately.
• A common approach was adopted to the interface with the client’s other service providers, which are common across the group for HR and payroll, to minimise delivery costs.

Results

• Significant economies in service costs and reduction in management time for the client.
• A consistent approach to the management of our client’s UK schemes – for example, joint trustee meetings have taken place and the client went out of its way to confirm that they had been very successful.

• A fresh look at the existing arrangements, which identified areas for review to improve further the operation of the schemes.

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