Findel Group Pension Fund

Following the completion of the 5 April 2019 actuarial valuation, the Trustee asked us to provide some indicative insurer pricing estimates, on the basis that some significant contributions from the employers were expected (which would improve the solvency position). We also put in place a monitoring system using our Illuminate tool, which allowed us to consider changes in market conditions on a daily basis, and consideration was also given to the member data in the context of a potential insurance policy.

Over this period, the Trustee worked collectively with the employer and their advisers to remind non-pensioner members of their options as they approach retirement using the existing flexible retirement option process already in place. Management of this process, as well as implementation of a well-hedged investment strategy improved the market-readiness of the Fund. Coupled with employer contributions, the solvency funding level materially improved, allowing serious consideration of a bulk annuity transaction.  

Over the summer and autumn of 2021 a significant amount of data and benefit work was accelerated in order to position the Fund in the best possible way to approach the insurance market. This work was completed in very short timescales balancing the need to be prepared before approaching the market with the desire to move quickly to avoid missing a potentially attractive pricing opportunity. It is worth noting that the Fund was already well placed on data and benefit matters due to various projects carried out since 2013.

Some of the challenges we helped the Trustee overcome included:

• a significant amount of data and preparation work, successfully considered in short timescales;
• clear visibility of the project and overall objective and proactive project management in response to developments to ensure the project met the required timescales;
• significant corporate changes with the employer during the process which challenged the viability of the transaction and involved Regulator engagement;
• complicated cashflow management and interaction with the premium payment and balancing payments; and
• the segregated nature of the Fund and the significant additional complexity this presented – such as section funding levels, the price lock and premium payment matters.

"We are delighted to have secured this deal with Standard Life. The transaction will deliver security to the members of the Findel Group Pension Fund and reflects many years of hard work by a strong and attentive Trustee Board and their advisers, along with contributions from the sponsoring employer. On behalf of the Trustee, I would like to thank all our advisers including Barnett Waddingham, FRP Advisory and Pinsent Masons for their advice and support in getting the Fund to this stage. I also thank PwC in their role as lead advisers to the sponsoring employer on this transaction and it is pleasing to see how well the Trustee and employer advisers worked together on this buy-in."

The following points were critical to achieving the positive outcome for the Fund:

• having a trustee board that is prepared and able to get strong training and develop into an effective and responsive decision-making team (which included having an independent trustee on the Board);
• importance of early consideration of the long-term objective and having a clear plan to deliver the objective;
• working constructively across all parties (including the employer and their advisers) and having clear communication between those parties at all times;
• well thought out preparation so that the Fund could move as opportunities arose; and
• flexibility to adapt and respond positively to developments throughout the process.

"Securing the buy-in represents a significant achievement for the Fund. The individuals that make up the Trustee Board have been so impressive in their engagement and drive over the years to achieve the objectives for the benefit of the members of the Fund. We very much look forward to working closely with the Trustee with the buy-in policy in place and to continue the success story for the Fund."