Buy-out and wind-up in just over 2 years

In just over 2 years, LCP helped the West Bromwich Building Society Staff Retirement Scheme move from two buy-in policies to full buy-out and wind-up.

Background

The Scheme had around £100M of assets and 1,000 members. Benefits were insured through two bulk annuity policies; a legacy 2013 buy-in with Aviva and a 2024 buy-in with Canada Life.

The Trustee and Society were keen to move to buyout and wind-up quickly. However, much remained to be done, including GMP equalisation, data cleansing and considering section 37 issues in response to the Virgin Media judgement under new legislation. There was also a potential surplus to address and payroll to transfer from the in-house team.

Helping all parties to understand the steps involved, whilst also distinguishing real constraints from opportunities to move faster, was key to agreeing a challenging but achievable timetable.

Our approach

LCP’s post-transaction specialist helped the Trustee and Society turn their objective into a practical delivery plan. The Trustee and Society challenged timescales from the outset, rightly seeking ways to move faster. Our experience helped balance this objective with a realistic timetable.

We developed a detailed plan upfront and explained how each workstream depended on the others. This showed everyone why some steps could not happen sooner, while highlighting opportunities to save time. For example, we showed how wind-up could be triggered (and therefore completed) earlier than first planned. In this case, the final balancing premium did not need to be known before triggering wind-up. This allowed the statutory surplus notification process to start earlier, cutting several months from the proposed timetable.

An effective working group was central to delivering this plan. Monthly meetings brought together Trustee and Society representatives, legal advisers, and LCP’s project management, actuarial and administration specialists.

Having the right decision makers and advisers involved meant benefit and data questions could be resolved quickly. Key decisions were ratified at later Trustee meetings. This avoided lengthy exchanges between advisers and kept the project moving at a good pace.

Alongside strategic advice and project management, we provided practical support in several specific technical areas:

• Addressing legal uncertainty: We worked with legal advisers on retrospective actuarial confirmations under the new Pension Schemes Act 2026. This was one of the first cases involving these confirmations.
• Coordinating two insurers: The initial plan was for both buy-in policies to move to buy-out at the same time. One insurer then gave just two months’ notice that it could not meet the planned March 2026 transition. We quickly assessed alternatives, helped the client agree a revised approach, and updated the plan and member communications. This limited the delay to just 2 months.
• Supporting the in-house payroll team: LCP provided administration services, but the Scheme’s payroll was managed in-house. Our administration team includes specialists focused on each main insurer. They guided the in-house team through the payroll handover process. When the delay arose, they helped split the payroll to accommodate two separate transition dates carefully managing the risks involved.
• Actuarial oversight of insurer pricing: We prepared independent estimates of the expected balancing premiums in advance. When one insurer quoted a figure around £1M higher than estimated, this enabled us to query it quickly and obtain a corrected figure, reducing the initial quote by around £1M.

The outcome

The project followed the agreed timetable almost exactly. One insurer’s late change to its transition date caused just a couple of months’ delay. The effective working group enabled a prompt, coordinated response which helped to minimise the delay.

The Trustees and Society understood the process the Scheme needed to follow and when they would need to make key decisions. Starting wind-up earlier allowed surplus notifications to run alongside other work. This shortened the overall timetable compared with completing each step in turn.

LCP combined realistic planning, nimble governance and hands-on technical support to maintain momentum through buy-out and wind-up. We kept the process robust, including correcting an overstatement of around £1M in the proposed balancing premium. Members experienced a smooth transition to buy-out with no surprises.