Liability Management

The pensions “freedom and choice” rules introduced from April 2015 have made it almost essential for Defined Benefit scheme sponsors to consider flexible retirement options for members - either as a standard option at the point of retirement, or as a bulk exercise open to all members over the age of 55. A formal valuation provides the perfect opportunity for accurate, up-to-date calculations to be performed to assess the potential impact of member options on scheme liabilities. But the valuation process can be challenging enough, without having to worry about assessing liability management options on the side. So, how can a scheme sponsor make the most of the opportunity without over-burdening its management team with pension issues?

In our paper “Pension Scheme Valuations - Challenges and Opportunities in 2015” we highlighted the impact of falling long term Gilts yields on pension scheme valuations and 5 actions for companies to consider for their defined benefit pension schemes.

In this paper we consider the last possible action: liability management.

Earlier Papers in this Series:
Pension Scheme Valuations - Challenges and Opportunities in 2015
Action 1: Reviewing the impact of your pension scheme’s Investment Strategy
Action 2: Preparing for a scheme funding valuation
Action 3: Dealing with a deficit & exploring alternative funding option

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