Making the Most of a Strong Position 


Tuesday, Dec 22
|    mins

10 second summary

  • Our client found themselves in a strong position, they were ahead of their funding objective and wanted to assess the options available to them. These included taking risk off the table or accelerating towards their endgame sooner.
  • We brought all the stakeholders together, at a one day workshop, to create a clear, strategic, objectives-focused environment at which the Trustees and Sponsor could assess the likely impact of each option.
  • This enabled them to select the approach that gave them the greatest chance of achieving the Scheme’s objectives.

What was the problem?

  • Our pension scheme client found themselves in a strong position, they were ahead of their funding objective and wanted to assess the options available to them:
    1. Reduce investment risk;
    2. Reduce longevity risk; or
    3. Accelerate towards buyout or self-sufficiency (and therefore reduce covenant risk).

What was our solution?

  • To reach a decision, the Trustees needed a clear framework to assess the different options available to them.
  • We modelled the potential outcomes for the Scheme over the long term, to show the relative impact of each solution. Then, with a clear picture, we brought everyone together – Trustees, Sponsor representatives, the Scheme Actuary and Legal Advisors – at an away day where we helped the attendees to:
    • Consider and challenge the strategic objectives of the Scheme, making these more explicit and understanding which were most important;
    • Understand the likely impact of each option, and how these outcomes ‘ranked’ against the agreed objectives;
    • Assess the opportunity costs and trade-offs associated with various courses of action; and
  • Use these insights to evaluate and benchmark potential strategies within a clear and consistent framework, to choose the approach which gave the greatest chance of achieving the Scheme’s strategic objectives

What was the outcome?

  • We created the space for all advisors and stakeholders to be involved in the decision-making process, without overlap or duplication. As a result, everyone around the table gained a better understanding of the real priorities for the Scheme.
  • This meant we could create a clear, strategic, objectives-focused, framework, which the Trustees and Sponsor used to choose between different options for the funding and investment strategy.

What does this mean for you?

  • We can help you create a clear, strategic, objectives-focused, framework, incorporating insights from all stakeholders, which will enable you to assess the different funding and investment strategy options available to you.

Want to know more?

If you would like further information, please contact:

Patrick O’Sullivan

Patrick O’Sullivan

Head of Investment Consulting

I've spent my career designing and adapting investment strategies of my pension scheme clients to deliver improvements in their funding levels whilst closely managing risk.

Carolyn Schuster-Woldan

Carolyn Schuster-Woldan

Managing Director

I have over twenty years of experience in the pensions industry. I joined Redington in April 2019, and advise clients ranging in size from 100m to £20bn on all elements of investment.

Karen Heaven

Karen Heaven

Managing Director

I am a lead investment consultant to a number of UK DB pension scheme / foundation clients. I joined Redington in 2011 after nearly 9 years in capital markets at an investment bank.

Pin It on Pinterest