Pensions strategy review, leading to cessation of defined benefit accrual
Pensions & benefits
The background
An association wished to review the pensions it was offering to staff, which included a variety of defined benefit (SHPS DB and Local Government Pension Scheme (LGPS)) and defined contribution arrangements (SHPS DC and a group personal pension). They wanted to understand their options, and the impact of those options on their costs and risks.
Our solution
We carried out a detailed analysis of their position and assessed the possible options on the grounds of their impact on cost, on risk, and on staff. The Board were able to make an informed decision, knowing that all relevant factors had been considered.
The outcome
Ultimately, the Board decided to cease the accrual of further defined benefit pensions, to limit the build-up of future risk. We helped implement this decision, which involved drafting communications and presenting seminars for affected staff, as well as negotiating with the LGPS to ensure that ceasing future accrual would not trigger a multi-million pound cessation debt.
