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We are all aware of the affordability issues that affect defined benefit pension schemes. In many cases, what started out as a relatively inexpensive perk for employees has now become a millstone around the employer's neck. But, at the same time, the increased press commentary and government reviews into public sector pensions has seen the appreciation of their worth grow. Despite this, many employers do not receive advice independently of the trustees' advisers.
Keeping a scheme going in some shape or form can still be viable especially if their design reflects affordable cost and risk. De-risking, cost sharing, covenant review and liability driven investment are all buzzwords being discussed by trustees, but what does it all actually mean for the employer?
We have helped many companies to restructure to achieve an acceptable solution for both trustees and sponsor. To facilitate the discussion we have available a scheme modeller, AXIS, that illustrates, in real time, the financial impact of different pension scheme designs.
Meanwhile, legislative changes and legal cases continue to impact on employee benefits - we ensure that our clients are aware of such developments in time; that they understand the options available; and that they are guided to solutions that make sense.
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