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Pension Scheme Management for Sponsors

Clear and comprehensive advice to help sponsors understand the impact of their choices on employees, stakeholders, and pension scheme members.

Strategic guidance for sponsors

As Sponsor there are a number of ways that schemes interact with and impact you. As schemes mature, funding improves, and the regulatory position develops there are new options and journey plans opening up that were not previously viable.

The risks and costs of both business and pension scheme operations directly affect how you achieve your business objectives. Strategic, informed and measured decisions cannot be made without understanding the full intricate landscape.

Here at Spence, we believe in clear and comprehensive advice that you can use to make the most effective decisions. Once your destination has been set, we can help develop the roadmap, maintain accountability and momentum to reach your goal.

Strategies for managing
Defined Benefit pension schemes

FUNDING STRATEGIES

Defined Benefit

Endgame planning

As schemes mature, funding improves, and the regulatory position develops, end game becomes crucial. Traditionally, this has been seen as transferring the scheme to an insurance company, but alternatives exist including running on the scheme and using consolidators.

New viable options could present a better opportunity. A strategic review of your endgame plan is the best place to start.

Funding

Pension commitments can significantly influence your company’s balance sheets. By carefully managing liabilities and cash flow, you can safeguard the stability of your company while fulfilling your pension promises.

At Spence, we work with you to develop sustainable funding strategies that align with your business goals. You are able to call on traditional methods or new approaches such as alternative and contingent assets and surplus management strategies.

Governance and consolidation

As sponsor with responsibility for the costs of running the pension scheme fees can be substantial. Our analysis shows typical fees for a 1,000 member scheme are £500k per annum. Different governance models and consolidation vehicles are becoming the norm.

Whether that means changing the relationship between sponsors and schemes or just simplify the running processes and lowering the associated costs. Spence helps you evaluate your current model and identify alternative options that will eliminate friction and enhance cost-efficiency.

Learn more about our Governance service

Multi-employer pension schemes

Participation in a multi-employer pension scheme, such as the Local Government Pension Scheme (LGPS), the Pensions Trust (TPT), or the Universities Superannuation Scheme (USS), presents unique challenges. These have similar costs and risks to other DB schemes, but sharing funding liabilities across various employers could have implications for your organisation’s future financial stability.

With comprehensive analysis and assessment of your options, which can include moving to a DC section of the scheme, transferring your share of assets and liabilities to another scheme, apportioning your liabilities to another employer or exiting partially or entirely, we empower you to make informed decisions that align with your strategic goals.

Find out more on the service that applies to you:

LGPS Charities

CORPORATE RESTRUCTURING

Strategic solutions for M&A pensions

Navigating DB liabilities

M&A activity or detrimental trading conditions bring DB funding and liabilities into sharp focus. Liabilities and funding obligations can be meaningful, putting transactions at risk or creating strain on recovery plans.

Spence helps you understand and value the risks, negotiate solutions with bidders or vendors and pension scheme trustees, and manage relationships with The Pensions Regulator.

Pension accounting for corporate disclosures

Your DB pension scheme represents a significant financial commitment, remaining on balance sheet until an eventual buy-out and wind-up. Auditing of the DB scheme assumptions and disclosures is becoming more onerous. Employers need to consider how to recognise DB surplus and risk transfer exercises on corporate accounts.

Spence provide assumptions advice and disclosures across all the main accounting standards, utilising our experience from our own client book, our pensions audit work for auditors, and our regular dialogue with the main audit firms.

Pension Scheme Management for Sponsors

Strategic guidance for sponsors

Strategies for managing
Defined Benefit pension schemes