Large scheme advisory
and insurer diligence

Case studies

The background

Our client is the trustee of a large multi-section pension scheme sponsored by the UK operations of a global pharmaceutical group. A guarantee is provided by the overseas listed parent company.

Our solution

We provide proportionate ongoing covenant advisory services to the trustees including quarterly monitoring which is integrated into the trustees’ IRM dashboards. We have also advised the trustees in relation to triennial valuations and in respect of corporate activity, most recently an acquisition to expand one of the group’s key divisions.

Shortly after completion of this acquisition, significant litigation emerged in association with the acquired company. We helped the trustees understand the impact of this fast-moving situation on their scheme’s covenant and adapted our monitoring and covenant advice in line with this.

As the scheme has become better funded, the trustee has been considering insurance transactions as part of its wider de-risking strategy. We have a market leading specialist service for clients to consider insurance counterparty risk, and we were commissioned by the trustees to support them with understanding the key financial strengths and risks of their insurer. Working to a compressed timeframe, we provided the trustees with a detailed report on both the particular insurer and the underlying insurance regime, subsequently presenting and discussing our advice at a trustee meeting. 

The results

This insurer diligence work enabled the trustees to progress confidently with their buy-in transaction, understanding how the security to member benefits would change as a result of the policy. We are continuing with our monitoring of the sponsor and have also incorporated a proportionate monitoring process regarding the trustee’s chosen insurer.

Chart your own course

Chart your own course

A tale of two journeys

In this report, we address the issues that pension schemes are facing today, provide tips on how to overcome them and prioritise different steps depending on your scheme’s position.

Read the report

How we can help

We help sponsors of pension schemes understand and manage the costs and risks associated with supporting their current and legacy pension schemes as well as other employee benefits.

We help trustees understand and monitor the employer covenant.

We help pension scheme trustees and sponsors to determine the ultimate destination for their scheme and help them put together a plan to get there, including how to effectively manage the risks they face along the way.

We help trustees achieve their strategic goals, with solution-led, appropriate advice.