When one of our longest standing Scheme Actuary clients decided to close their final salary pension scheme to future accrual, they asked us to manage the process.
The first hurdle we encountered was that the wording in the original Trust Deed, which dated from the 1980s, prevented the link to final salary being broken for active scheme members. This was a major issue for the company, who needed to control the volatility in their pension scheme costs.
The solution that we proposed was to offer members a fixed rate of ‘salary’ increases in future, in return for their agreement to break the link to actual salary increases. This required careful explanation to members.
After drafting written communications in plain English giving full information to the members, we then attended meetings to present the proposal and answer questions. The result was 100% agreement to the changes.
From the outset we worked together with the trustees and company to achieve a solution that met the objectives of all parties, without detriment to the members. This collaborative approach, coupled with pragmatic advice along the way is a major theme of the way we work. We kept the project on budget and helped to meet the timetable agreed with the client and members.
A flow chart of the typical process we follow for an actuarial valuation is set out below. There are some differences in our approach compared to our competitors. Results and advice are provided quickly to give more time for discussions. Benefit calculations are spot checked to give trustees comfort that the scheme is running smoothly. Our actuarial valuation tool helps our clients to consider the impact of changes in assumptions at the valuation meeting.
We usually work on a time cost basis, but we’re happy to agree maximum fees in advance for major projects.
As our overheads are lower than those of the larger firms, we are able to maintain lower charge out rates. We tend to find that our rates are around 2/3rds of the larger consultancies.
‘We are very happy with our change of advisors, not driven simply by the need to reduce costs, but more importantly to work with a smaller more responsive team who also seem to value their clients.’
Director & Trustee,
Our client retention is impeccable and it’s something we’re extremely proud of. Some of our clients have been with us since inception and we consider them friends as well as clients.
Our friendly approach, reliable service and pragmatic ethos are just a few reasons why we maintain and prolong working relationships with clients.