Case Study: Benefits of a team model
A 9am message to the team with the following scenario.
- Stressed situation
- Largish scheme, say 65% funded on fairly soft TPs basis
- approaches March 2021 valuation with large but weaker sponsor
- Foreign parent
- Closed but relatively immature
- 75% hedged, 40% growth/60% matching
- Sponsor resistant to guarantees and other protections
- what would be your highest priority to try to achieve?
- what unusual/creative measures have you seen – could be covenant strengthening, investment, triggers, other….
By 12:30pm the answers have poured in.
There were 12 alternative options proposed with many agreeing on their approach. With a focus on security several suggested an asset backed finance approach with freehold properties owned by sponsors within their business being used to provide additional security to pension scheme.
From a covenant perspective securing a binding information sharing protocol with requirements equivalent to those of creditors/rating agencies was offered.
And investment approaches were also mentioned such as appointing two investment advisers to simultaneously advise trustee and challenge one another in designing optimal investment strategy/portfolio (then revert to one).
What does this mean for our clients?
- Speedier decision making
- Less need to pay for external advice in some circumstances
- A better informed trustee board
We make much of the fact our trustee directors are salaried, largely full time and usually based together in one office. That’s because it really does add value for our clients. The breadth and depth of knowledge available instantly is vast and results in clients seeing swift decision-making based on tried and tested experience.
This is just one example of the daily collaboration within LawDeb.
Meet the full pensions team and see the breadth and depth of insight to which our clients have access.