Pensions Liability Management

The current challenges of defined benefit scheme funding mean many businesses are looking at an increasingly large variety of options for modifying schemes to re-shape their liabilities.

We provide high quality advice for employers and pension scheme trustees on the full range of solutions in this area.

We have a demonstrated track record of practical, commercial assistance with changes to accrued rights (in particular the developing case law on the use of Retail Prices Index (RPI) and Consumer Prices Index (CPI) in pension schemes) and modification projects such as pension increase exchanges, enhanced transfer values), winding up lump sum and trivial or small commutation lump sum exercises and changes to future benefit accrual including longevity adjustment factors, moving from final salary to career average or defined contribution benefits, and scheme closures.

We provide support every step of the way, offering:

strategic advice on the legal feasibility and implementation of projects, including scrutiny of employer proposals for trustees and negotiation of benefit designs
analysis on scheme amendment powers and the availability of alternative legal methods for making changes
practical assistance with design and implementation phases, for example benefit specifications, assistance with communications and day-to-day support with member queries
advice on structuring and handling member consultation exercises
advice on best practice and compliance with the Industry Code on Incentive Exercises
working with other advisers to help clients select and appoint external partners such as insurers, consultants and member advisers
transition of one-off exercises into standing options to be offered as standard for future retirees.

We participate in a wide range of pensions industry groups.

Work examples

Acting for a major financial institution to redesign its defined benefit schemes around a ground a ground breaking "selectable accrual" principle.

Advising numerous employers on the closure of their defined benefit schemes.

Advising a wide range of employers an trustees on modification exercises including PIEs, ETVs, WULS and communications.

Acting for two large pension schemes in relation to the introduction of longevity adjustment factors, which increase the earlier age at which members can draw their pensions unreduced if scheme members live longer than expected.

Advising ZF UK (formerly TRW) Pension Plan on its £3.5bn liability management exercise with was completed to a very tight deadline and with innovative features, including a record breaking £2.5bn buyout with Legal & General. This included regulation of the buyout agreement, GMP equalisation and conversion, and integrating a WULS, PIE and ETV exercise into the buyout process.

‘Up there with the very best’ for technical ability, but what sets it apart, say clients, is the time taken to ‘understand the scheme and its sponsor and tailor the advice accordingly.'