The Trustee Business Plan
Oval specialist Simon Chrystal rethinks the approach to deficit reduction with DB schemes.

Did you know?
69% of Defined Benefit pension schemes in the UK are facing deficit and our largest 7,400 DB schemes are currently running an estimated shortfall of £2.2 billion1.

As a trustee or finance director overseeing a Defined Benefits pension scheme, you’ll appreciate its many pressures. A DB scheme in deficit creates conflict between employers watching out for the business and trustees taking care of the membership – sometimes unmanageably so.

The problem may not be going away any time soon but that doesn’t mean DB deficit pressures cannot be eased. Take a step back and it’s clear that your DB scheme is actually another part of your business. One that needs to deliver a product - the benefit - efficiently, cost effectively and above all, without compromising quality or performance for its consumer.

A new approach to an old relationship

Oval has re-booted the approach to DB schemes with our Trustee Business Plan. We recognise the strains placed on the balance sheet of any employer with a DB pension scheme. We also recognise the importance of the trustees’ role in protecting the interests of the members through any potential change process. TBP is a balancing mechanism, helping trustees work in harmony with employers by approaching the scheme as a business that demands the pragmatic decision making needed to optimise it for today’s pressures. Our approach is a glide path for securing member benefits and the springboard for renewed vigour in the future delivery of pension and benefits to employees.

TBP has three implementation stages:

• Corporate Governance – data management and shaping
  Internal controls and due diligence to specification, cash flow management and training
• Operations Management – outsourced pensions management
  Consulting and administration to actuarial, investment, audit and legal functions
• Funding Security and Risk Management – certainty and security
  Buy in and early retirement to Enhanced Transfer Value and longevity management

TBP starts with a review of scheme governance and an understanding of the readiness of a particular scheme to take positive actions. This might range from data hygiene and quality to internal controls, company covenant to PPF shaping. When we have agreed a joint course of action based on the particular set of issues we then begin the day to day running of the scheme through our administration, investment, actuarial and consulting functions. When the time is right, we help the trustee and employer move toward certainty and security through a range of risk management tools.

If you have concerns about the long-term fitness of your DB scheme, then think about TBP from Oval. It’s a pragmatic, focused solution that provides real world, real time solutions to employers and trustees that address today’s DB issues and help turn an unwieldy overhead into a strategic business asset.

1 Pension Protection Fund Research, The Daily Telegraph, 12 May 2010

Like to find out more about Trustee Business Plan and how Oval can help re-energise your DB scheme? Contact Simon Chrystal on 07771 611224 or email: simon.chrystal@theovalgroup.com