Client situation

Our client is a national UK charity that participates in a large multi-employer scheme. Changes to accounting legislation have resulted in a section of the scheme that was previously regarded as DC (with a guarantee that the value of an individual’s fund would never be less than the contributions made) now being classed as DB.
This has had unintended consequences in the form of an additional Section 75 exit debt for the employer, and potentially poor retirement outcomes for the members due to a very defensive (cash-based) investment strategy.

Our approach

We identified that within the multi-employer scheme there is a newer DC section that provides members with pure DC pension provision via a range of funds. Members transferring from the older DC section are likely, in the long-term, to achieve far greater investment growth and therefore better outcomes at retirement.

We assisted both the Charity and their scheme members by:

• Designing a written communications strategy to give the members the information needed to make a transfer
• We ran a series of engaging member presentations to provide further information and answer any questions that the members wanted to ask
• We facilitated the transfer process, checking all paperwork thoroughly and liaising with the administrators of the scheme

Outcome for the client

The take-up of transfers from the old to the new DC section was significant with around 80% of members deciding to proceed.
The Charity is likely to see a significant reduction (£1m+) in their exit debt from the scheme, and the members can expect to receive better retirement outcomes via long-term investment growth.

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Contact Details

55 Baker Street
London, W1U 8EW
United Kingdom

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