An Alternative to Pension Scheme Financing

The threat of continued low gilt yields, coupled with lower arrangement costs, has prompted more pension schemes to consider contingent funding/assets to fund their defined benefit liabilities. Whilst to date this has typically been the domain of the larger schemes, more mid to small schemes are now considering this option.

Contingent funding/assets – i.e. payments that are made to the scheme only under certain circumstances – can be a significant benefit to employers faced with increasing scheme deficits and rising costs.

For example:

  • They reduce a scheme’s liability and therefore the level of direct employer contributions
  • They allow employers to agree longer and/or back-end loaded recovery plans, and
  • They can reduce the PPF levy

Whilst most of the major consulting firms can advise on these arrangements, PTL has broad experience of implementing these solutions. This allows us to not only advise on the various contingent funding/asset solutions, but also their implications and how they are viewed by the Pensions Regulator. It also equips us to work with the Trustees to implement the preferred contingent funding/asset option.

PTL’s Process – how we support your business

Our approach is to be pragmatic, personable and professional.

Being pragmatic is important. No two situations, no two problems are the same. Our pragmatic approach allows us to find sensible, common sense solutions that meet the need of all parties. A pragmatic approach is also a more cost effective approach.

Being personable is important. We all spend a lot of time working. It makes life more pleasant and work more bearable if our working relationships are friendly, warm, open and constructive. We build teams that will serve each client around that client’s needs and preferences.

Being professional is important and should be a given. The characteristics of professionalism we consider particularly important include being trust worthy, being an expert in our field, working to the highest standards, behaving ethically and fairly, observing clients confidentiality and treating all clients, colleague and others we contact in our work with consideration. 

Our approach is to be collegiate, to work as part of a team with our clients and their other advisors. We aim to identify your objectives, establish how to achieve it and execute the resultant strategy.

Our approach is to be creative. The best approach to a matter or solution to a problem is not always the most obvious or established. We encourage our team to innovate externally for our clients and internally for PTL.

Contact

Please contact a member of our team to discuss our Alternative to Pension Scheme Financing further on 0118 957 0610 or email info@ptluk.com