Funding and transformation for defined benefit pensions

Ensuring defined benefit pension schemes are appropriately funded and managed is key to ensuring members’ pensions are paid, to comply with regulation and to avoid reputational damage. Regulation now sets expectations for both short-term and long-term funding targets. Many defined benefit pension schemes are reaching the point where pensions being paid out are higher than contributions being paid in.

At PwC we help our clients to fund and manage their pension obligations appropriately, looking at all the options available to ensure that benefit promises can be met both now and in the future.

Whether you are a pension scheme trustee looking for a new perspective or a scheme sponsor looking for an advisory partner, the PwC team will support your pension scheme funding strategy. We will help you to form a clear picture of:

  • What benefits need to be funded. For example, does the way the pension scheme is being administered agree with the scheme rules? Can benefits linked to historical measures of inflation be modernised and linked to updated measures?
  • The UK pension scheme funding landscape including the regulatory requirements, market norms and emerging trends.
  • What your business can support from a cost and risk perspective and what this means for a long-term funding target and pensions exit strategy (an example of an exit strategy might be to transfer your pension scheme to an insurer or pensions consolidator).
  • How risks can be reduced, timescales to full funding shortened, running costs and other demands on cash optimised and how the issue of ‘trapped surplus’ can be avoided?
  • How funding plans should be monitored, what advisory and governance structure will work best for your defined benefit pension plan.

Defined benefit pension schemes are at a crossroads. Many are now relatively mature with aging members; cashflows out of schemes are increasing. Ensuring that pensions are paid, regulation is compiled with, and reputational risks are minimised has always been the aim of trustees and sponsors but we are quickly reaching the point at which an efficient structure to deal with the runoff of a pension scheme is key.

At PwC we have a multi-disciplinary team of defined benefit pensions experts, that can support the design, implementation and monitoring of your long-term pension strategy. Including:

  • actuarial and funding
  • legal
  • covenant
  • insurance transactions
  • investment strategy
  • investment outsourcing
  • advisor and administrator reviews
  • ESG
  • technology

Contact us

Saye Mkangama

Saye Mkangama

Pensions Partner, PwC United Kingdom

Tel: +44 (0)7715 211435

John Dunn

John Dunn

Director, PwC United Kingdom

Tel: +44 (0)7525 926230

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