Benefit design and liability management

Effective management of DB liabilities is one of the biggest concerns for both companies and trustees with DB pension arrangements.

We work closely with employers and trustees to help them bring their liabilities under control. This involves advising on all aspects of benefit design and future service benefit changes such as closure, salary capping, reduction of future accrual, going hybrid, and changing from RPI to CPI. Our experience means we’re well placed to advise on the complex issues that arise and offer pragmatic and tailored advice for each situation.

We also advise on past service benefit changes such as bulk transfers, PIEs, trivial and small commutation exercises, GMP reconciliation, equalisation issues and ETVs. Our aim is to give you practical guidance, coupled with clear commercial advice.

Recent experience

  • Advising the trustees of a multi-employer non-associated open DB scheme on a significant benefit reform which involved moving future accrual of all members from final salary to CARE
  • Assisting the trustees on a substantive benefit reform exercise including a pensionable pay cap and changes to accrual rates
  • Helping employers and trustees in relation to the closure of numerous DB schemes of all sizes and structures, including assessing the strength of the business case, legal options, and communications with members and union representatives during and after the consultation process
  • Advising the trustees of a number of schemes on how to introduce retirement transfer options and on the risks around what could constitute an enhanced transfer value exercise
  • Advising the trustees of a scheme implementing a small pot and trivial commutation exercise at retirement in line with the industry code on incentive exercises
  • Advising the trustees of a hybrid scheme on how best to introduce a pension increase exchange option at retirement.