Pope Anderson LLP

When a scheme closes to DB accrual, and is replaced by a DC arrangement for current staff, a number of things happen – some straight away, some over time.

• The main focus for the Trustees changes to managing accrued liabilities and the likely deficit that is in place
• The investment time horizon shortens significantly and needs to be considered
• The employer will understandably be concerned with its current staff who will now be on Dc terms. The DB arrangements will become increasingly legacy arrangements to be managed efficiently over many years.
• Employers are likely to take an even closer eye on costs.
• Employers will need a longer term decommissioning plan to remove the risk associated with even legacy DB liabilities
• The DB scheme is now a completely different beast, with different concerns and needs.

This should be a prompt to review all aspects of the scheme and the advisers in place. Not all advisers are set up to deal with closed schemes and the scheme may move further down the priority list of advisers without the prospect of longer term fee generation potential.

Whilst it may have been appropriate to pay for the bells and whistles when the scheme was open, it is likely that the focus should now be on managing all aspects of the scheme in a cost efficient manner concentrating on giving members a good service throughout.

Pope Anderson is extremely well placed to meet exactly the needs of the trustees and employers in these circumstances. We offer a one stop shop approach that deals with everything that is needed but in a way which will save the scheme and employer money

• Fully integrated administration, actuarial, investment and consultancy support.
• Investment strategy designed to reduce and manage volatility and deficit.
• Efficiency savings by not having separate providers with someone needed to coordinate these providers.
• We do the basics very well but do not suggest projects and services that aren’t needed.
• We do not look down our noses at schemes of less than £100m but instead consider all schemes as valued clients.
• We do not treat closed schemes as training clients for newly qualified staff.  You will still be dealing with the senior staff in the business.
• We do not have high overheads with lots of posh offices, overseas operations and sales and marketing teams. These savings get passed on to you.
• You get the benefit of a bespoke service and advice rather than an ill fitting off the peg approach.

As well as this it is also important for the Employer to have in place a decommissioning plan so that the end point can be managed and steered towards.

If you are a Trustee or Employer and would like a chat about whether we could be a good fit for your scheme then please contact one of the partners.

Winding Up

We have a dedicated discontinuance project team with over 30 years of administration, consultancy and trusteeship experience between them.

We understand the need for the trustees to manage risk and to take comfort in the work that is provided by their advisers.  This applies at all times but tends to become a focus when a scheme is closed, and even more so if there is no longer a sponsoring employer.  We work closely with trustees to reduce and mitigate risk at all times.

Pope Anderson offers:

• A pragmatic approach to the project, whilst maintaining an eye on the bigger picture.
• Knowledgeable and experienced staff that understand the trustees’ needs.
• Efficient processes that focus on on-time, on-budget delivery where work is conducted at the most appropriate level.

We realise that the wind-up, or transition of a scheme to the PPF or FAS, is the last good job that we can do for our clients.  We take pride in the fact that we provide an excellent service and value for money to what we know will be a short term appointment.

Managing Scheme Discontinuance and Winding-Up

Historically schemes were closed or wound-up following employer insolvencies.  However, in recent years there has been a desire by many trustees and sponsors of ongoing schemes to manage risk and improve member security by discharging the liabilities to a third party, such as an insurance company or specialist buy-out provider.

We have worked with many companies that are looking to manage their liabilities in this way and enjoy good working relationships with all of the major annuity and buy-out providers in the market.  Our staff have been involved in many such situations and have significant experience in this area.

We understand that historically, an administration provider’s focus lay with schemes where there is perceived to be a long-term future relationship.  Not surprisingly, trustees of closed schemes or schemes being wound-up have often seen things go awry and costs escalate well beyond initial estimates, purely because proper resources have not been applied.  Pope Anderson can help the trustees take back control and complete the project in a timely and efficient way.