Spence Corporate Advisory
Corporate Advisory Services
Corporate Advisory Services
With two thirds of defined benefit schemes either closed to new members or to the build up of future benefits, these arrangements are very much in “legacy” mode. Yet, they remain a major risk for corporate sponsors.
Step 3 – Get involved in investment strategy • Work with trustees on the most appropriate investment strategy. • Seek to reach a balance between return-seeking and matching assets.
We have developed a five-point process for managing legacy schemes:
• Agree how the strategy will evolve over time e.g. if funding level improves/deteriorates.
Step 1 – Define your target
Step 4 – Take a modern approach to scheme funding
• Where do you want to get to?
• Use technology to ensure up to date information is available to all parties.
Buy-out: Removes any further risk to the employer. Self-Sufficiency: To reach a level of funding where major risks are eliminated and the need for further contributions is minimised. • When do you want to get there? Short term: 0-5 years Medium term: 5-10 years Long term: 10 years+ • Is this target achievable? • How well can you support the scheme? This will dictate your approach to scheme funding and the level of risk underlying your investment strategy.
• Focus on an overall long-term target – manage the scheme at ALL times, not just once every three years. • Adopt a collaborative approach with trustees. • Consider alternatives to immediate cash funding e.g. contingent security, funding partnerships, profit-sharing agreements.
Step 5 – Manage costs and improve efficiency • Technology is driving down the cost of providing information. • Ensure advisor costs are competitive. • Actively manage the ancillary costs e.g. PPF levies.
Step 2 – Manage liabilities pro-actively • Reduces risks associated with the scheme and ultimate buy-out cost. • Expect net savings of £2 for every £1 spent on incentives. • Offer a combination of transfer values, early retirement and pension increase exchanges.
• Review on-going costs/scheme design for open schemes.
Other Services
Accounting for pension costs
Corporate restructures/mergers & acquisitions
• Real time figures for FRS17, IAS19 and US GAAP.
• Significant recent experience advising purchasers and vendors in acquisition negotiations.
• Projections of year end results and budget figures for the following year. • Analysis of impact of alternative financial and demographic assumptions. • Analysis of one-off events e.g. scheme closure, benefit changes, settlements/curtailments.
• Management of numerous corporate restructures/ compromise deals. • 40% of defined benefit schemes likely to be affected by a compromise or restructure event.
Buy-ins/Buy-outs • Likely end-point for most schemes. • Daily-tracking of buy-out funding position. • Independent “buy-out ready” check on scheme data and benefits. • Have managed buy-in/buy-outs with most providers.
Spence & Partners Spence & Partners is a privately owned UK firm of actuaries, pension consultants and administrators. Established in 2000, our business has grown steadily since; we employ approximately 100 staff across offices in London, Glasgow and Belfast. Spence provides support services to employers and trustees operating workplace pension schemes. Our clients range from large UK PLCs and major Government bodies to small to medium sized schemes, requiring engaged and proactive advisers, actuaries and administrators.
We provide full pension actuarial, consulting and administration services for over 50 schemes and advisory and support services to over 100 trustee boards and sponsoring employers. Our focus on using innovative and technological solutions provides a more efficient and cost effective service. Our professional, caring and approachable team ensures that we are able to provide the very best service for our clients.
Alan Collins MSci FIA
Head of Corporate Advisory Practice Alan assists employers in achieving a sustainable business future in light of their pensions obligations. Having achieved a first class honours degree in mathematics and physics from Glasgow University, Alan has now worked in the pensions industry for over 15 years.
Over recent years, Alan has contributed articles to publications such as Accountancy Age and PMI magazine. Alan has also presented at a number of industry forums and recently presented to the Institute of Chartered Accountants Scotland Pensions Conference on State Pension Reform.
Alan has been a Fellow of the Institute and Faculty of Actuaries since 2006 and has held formal Scheme Actuary roles since 2008.
“I believe the employer has a responsibility to take an active role in managing their pension scheme arrangements. I am proud that my expertise has helped employers make often tough and technical decisions with confidence.”
Spence & Partners Limited 22 Great Victoria Street Belfast BT2 7BA T : +44 (0) 28 9041 2000 4 West Regent Street Glasgow G2 1RW T : +44 (0) 141 331 1004 1 Berkeley Street London W1J 8DJ T : +44 (0) 20 7495 5505 E : [email protected] spenceandpartners.co.uk
Authorised and regulated by the Financial Conduct Authority. Registered No. NI37760
Corporate Advisory Services
With two thirds of defined benefit schemes either closed to new members or to the build up of future benefits, these arrangements are very much in “legacy” mode. Yet, they remain a major risk for corporate sponsors.
Step 3 – Get involved in investment strategy • Work with trustees on the most appropriate investment strategy. • Seek to reach a balance between return-seeking and matching assets.
We have developed a five-point process for managing legacy schemes:
• Agree how the strategy will evolve over time e.g. if funding level improves/deteriorates.
Step 1 – Define your target
Step 4 – Take a modern approach to scheme funding
• Where do you want to get to?
• Use technology to ensure up to date information is available to all parties.
Buy-out: Removes any further risk to the employer. Self-Sufficiency: To reach a level of funding where major risks are eliminated and the need for further contributions is minimised. • When do you want to get there? Short term: 0-5 years Medium term: 5-10 years Long term: 10 years+ • Is this target achievable? • How well can you support the scheme? This will dictate your approach to scheme funding and the level of risk underlying your investment strategy.
• Focus on an overall long-term target – manage the scheme at ALL times, not just once every three years. • Adopt a collaborative approach with trustees. • Consider alternatives to immediate cash funding e.g. contingent security, funding partnerships, profit-sharing agreements.
Step 5 – Manage costs and improve efficiency • Technology is driving down the cost of providing information. • Ensure advisor costs are competitive. • Actively manage the ancillary costs e.g. PPF levies.
Step 2 – Manage liabilities pro-actively • Reduces risks associated with the scheme and ultimate buy-out cost. • Expect net savings of £2 for every £1 spent on incentives. • Offer a combination of transfer values, early retirement and pension increase exchanges.
• Review on-going costs/scheme design for open schemes.
Other Services
Accounting for pension costs
Corporate restructures/mergers & acquisitions
• Real time figures for FRS17, IAS19 and US GAAP.
• Significant recent experience advising purchasers and vendors in acquisition negotiations.
• Projections of year end results and budget figures for the following year. • Analysis of impact of alternative financial and demographic assumptions. • Analysis of one-off events e.g. scheme closure, benefit changes, settlements/curtailments.
• Management of numerous corporate restructures/ compromise deals. • 40% of defined benefit schemes likely to be affected by a compromise or restructure event.
Buy-ins/Buy-outs • Likely end-point for most schemes. • Daily-tracking of buy-out funding position. • Independent “buy-out ready” check on scheme data and benefits. • Have managed buy-in/buy-outs with most providers.
Spence & Partners Spence & Partners is a privately owned UK firm of actuaries, pension consultants and administrators. Established in 2000, our business has grown steadily since; we employ approximately 100 staff across offices in London, Glasgow and Belfast. Spence provides support services to employers and trustees operating workplace pension schemes. Our clients range from large UK PLCs and major Government bodies to small to medium sized schemes, requiring engaged and proactive advisers, actuaries and administrators.
We provide full pension actuarial, consulting and administration services for over 50 schemes and advisory and support services to over 100 trustee boards and sponsoring employers. Our focus on using innovative and technological solutions provides a more efficient and cost effective service. Our professional, caring and approachable team ensures that we are able to provide the very best service for our clients.
Alan Collins MSci FIA
Head of Corporate Advisory Practice Alan assists employers in achieving a sustainable business future in light of their pensions obligations. Having achieved a first class honours degree in mathematics and physics from Glasgow University, Alan has now worked in the pensions industry for over 15 years.
Over recent years, Alan has contributed articles to publications such as Accountancy Age and PMI magazine. Alan has also presented at a number of industry forums and recently presented to the Institute of Chartered Accountants Scotland Pensions Conference on State Pension Reform.
Alan has been a Fellow of the Institute and Faculty of Actuaries since 2006 and has held formal Scheme Actuary roles since 2008.
“I believe the employer has a responsibility to take an active role in managing their pension scheme arrangements. I am proud that my expertise has helped employers make often tough and technical decisions with confidence.”
Spence & Partners Limited 22 Great Victoria Street Belfast BT2 7BA T : +44 (0) 28 9041 2000 4 West Regent Street Glasgow G2 1RW T : +44 (0) 141 331 1004 1 Berkeley Street London W1J 8DJ T : +44 (0) 20 7495 5505 E : [email protected] spenceandpartners.co.uk
Authorised and regulated by the Financial Conduct Authority. Registered No. NI37760
