DB Navigator: the framework
Packed with case studies to help you navigate each confluence, takeaways to steer you on the right course and videos to guide your DB pension scheme strategically through the choppy waters of endgame planning.
Think of your defined benefit (DB) pension scheme journey as a flowing river – one that has distinct stages, may benefit from the confluence of multiple schemes, and will change shape with the wider landscape in order to progress as efficiently as possible. You may still be many years from its conclusion, but it is imperative that you know all the options to explore and navigate the issues you will face along the way.
A clear and simple decision-making framework is therefore needed to ensure you identify the direction that’s right for you and keep you on a steadily moving course to achieve the desired outcome for your scheme. Barnett Waddingham introduces DB Navigator – our holistic Actuarial, Investment and Administration approach that gives you the knowledge, structure and tools to optimise your strategy for tackling the journey towards your DB endgame.
Each company and scheme has its own unique set of circumstances, which will determine the right target. Many companies have cost and risk constraints and are grappling with the tricky act of balancing compliance expenditure, business investment and providing returns to shareholders. The pension scheme target and journey to get there will impact on all of these areas.
For many schemes this target will be a transaction with an insurance company, but there are other options available to consider. For example, rather than buying-out, should you run-on, or should you approach one of the new consolidation vehicles?
DB Navigator combines Barnett Waddingham’s market-leading actuarial, admin, investment and pensions management expertise to ensure that your journey plan is considered holistically. We’ll help you ensure that all your other advisers are asking the right questions too. All the bases will be covered.
Not only this, we can also help you to agree where you’re heading, to set a target timeline for arriving, and to design an integrated funding, investment and administration strategy to get you there. We have pulled together our best insights that explore these options to help you set your endgame journey strategy, applying our independent, impartial approach.
It is inevitable that progress won’t be exactly in line with your initial plan, so once your target and journey strategy have been set, we will help you set a clear framework for monitoring progress and where you can adjust your course.
There are a number of different issues that need to be considered in order to stay on course – the DB Navigator framework enables you to fully explore these areas and select what is right for your specific circumstances. The key is that your monitoring should be focused on your long-term target, and should help you make better decisions to realign your journey to that target. Our real-time monitoring tools will ensure that you always know how you’re progressing, and you’ll know what you need to do to get yourself back on track.
Using Illuminate, our specialist monitoring tool, will help to provide clear direction through the financial management of your scheme.
The endgame for DB schemes is well underway and monitoring the journey is an important part of the endgame strategy. That’s why we’ve created DB End Gauge - a monthly index providing an estimate of the average time for pension schemes to reach a sufficient level of funding to buyout their liabilities with an insurance company.
DB Navigator® is brought to life by Illuminate – our specialist tool designed to guide you through the financial management of your DB scheme. It will help answer key questions, such as when you can expect to reach your endgame and what actions you can take to speed up your journey or reduce risk. Through a customisable monitoring dashboard it will also help you capture opportunities and warn you of impending problems.
As you embark on your endgame journey, our research will give you a deeper insight into the issues relevant to your scheme and will allow you to benchmark your progress against others. This can help you in planning your own endgame strategy.
Our DB Navigator framework is designed to help you think strategically about your endgame planning. We answer five core questions from different advisory perspectives to illustrate how each stage of a DB pension scheme needs to be efficiently co-ordinated, keeping you on a steadily moving course to achieve the desired outcome for your scheme.
There are a number of different options available to optimise your endgame journey – allowing you to either accelerate progress, lower costs, or to take less risk along the way, particularly as there may be many obstacles ahead.
There are various manoeuvres you can make to achieve this, including liability management exercises and investment strategy changes.
As an independent firm, we can help you explore your options properly by providing a full impartial review of market solutions and recommending those that best fit the shape and direction of your scheme.
Closing your funding gap to your endgame target is only part of a successful implementation of your scheme’s endgame. There are other essential and important actions to prepare for when that point finally arrives.
This may involve forming an appropriate market engagement strategy to prepare for buyout, securing accounting advice and data cleansing measures to finalise the journey.
Our experienced team is able to help you approach this watershed moment with confidence. For example, our admin teams can help you ensure your data is ready for whatever lies ahead, and our investment team can help you design and implement a buyout- or self-sufficiency-ready asset strategy. Whatever you need to do to get ready, our independence means that you can be confident that our recommendations have just one interest at heart – yours.
Implementing the final part of the journey often requires dedicated transaction support. Whether your scheme is heading to buyout, self-sufficiency or somewhere else, we can help you put that plan into practice.
Only through collaboration with independent, expert advice can trustees and sponsors be confident in avoiding the potential hazards, securing the best deal for members and sponsors, and moving everyone onto new horizons. Our experienced team can help you through this.