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DB Optimise
Helping companies sponsoring defined benefit pension schemes to improve governance, reduce cost and manage risk.
Why companies should take a closer look at their DB scheme
Defined benefit (DB) pension schemes are well known for their complexity, high costs and governance burden. Scheme management will often be based on legacy arrangements that have evolved reactively over time in response to personnel and regulatory changes.
Too often, this results in arrangements that are more complicated and expensive than necessary, and companies that are struggling to achieve the level of control that they would expect.
Adding value through independence
With DB Optimise, you can take a fresh, independent look at the overall management of your scheme. This will identify opportunities to improve governance, reduce cost and manage risk, making a real difference to the management of your DB scheme.
Why now?
The DB pension landscape is vastly different to just a few years ago and what worked in the past is unlikely to be the best approach for the future.
Corporate sponsors have, for the first time in decades, a realistic prospect of their DB scheme returning surplus assets to them, so controlling costs incurred by the scheme could have a direct financial benefit for the sponsor.
The ‘LDI crisis’, cyber security incidents and increased regulatory scrutiny have all shown the importance of good governance and controls – and the costs where it is lacking.
"The power of DB Optimise lies in the depth of our experience in DB scheme management. Our comprehensive review provides companies with the insights to regain control and ensure their DB scheme is being run as efficiently as possible."
Five-step review to achieve better outcomes
DB Optimise strips away the layers of complexity and focuses on the five key areas where the company can have a real impact on the management of its DB scheme.
Scheme governance
We assess the existing scheme governance model, exploring simpler or more effective structures.
Investment governance
We review the existing investment governance model, along with investment costs and risk controls.
Budgeting and costs
We analyse scheme-related costs, how they’re monitored, and whether they offer good value for the company.
Funding strategy
We consider the clarity and control the sponsor has over funding objectives and whether better strategies are available.
Member experience
We review communications, administration, and retirement support to assess how well members are served.
Our review service is structured as follows:
- Initial interview with company representatives and our actuarial, investment and governance specialists to discuss DB scheme arrangements.
- Review of appropriate scheme and company documentation.
- Report outlining how effectively the DB scheme is being run, providing assurance and/or recommendation for areas of improvement.
- Follow-up call to discuss findings and actions to improve governance, reduce cost and manage risk.
From obligations to assets
Could DB schemes be changing from obligations to assets? Rising bond yields and stalling life expectancy have pushed DB pension schemes into surplus positions - are they changing from obligations to assets?
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Revisiting endgame
Determining the best strategy for your scheme. Is your endgame still relevant? Simon Taylor explores why now is the ideal time for sponsors to re-evaluate their strategy.
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DB surplus funding DC contributions
How to use your DB surplus to fund DC contributions. In light of recent tax changes and consultations from the DWP on surplus 'extraction', funding DC contributions is a viable option for those with a surplus.
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DB surpluses and discretionary benefits
With improving pension scheme funding, wage growth and more schemes considering running on in surplus, will discretionary pension increases make a comeback?
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Run-on a fully-funded pension scheme
Faced with the choice of proceeding with a buyout or continuing to run the scheme, the trustees and sponsor of a DB scheme sought expert guidance.
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