Corporate Consulting

The pension scheme can expose a business to significant costs and risks. This thought piece looks at ways that a sponsor can put in place the corporate controls on a pension scheme that it would normally do with a subsidiary business.

With the advent of IAS 19 and the Pensions Act 2004, a pension deficit now looks much more like debt: it is on the balance sheet, the interest on it is recognised in the P&L and the creditor needs to be considered in any refinancing or restructuring. It is not surprising, therefore, that many companies would find an offering to take the pension liability off their hands as very attractive – and many would probably pay over the IAS 19 liability measure to see the back of it. This thought piece examines the right price for the liability to change hands. In other words, what is an entitlement to a DB pension worth?

Until recently contingent funding has had a low profile in the UK pensions arena. As a result of rising costs and increased trustee powers, an increasing number of companies have begun to investigate the extent to which contingent funding represents a practical alternative to directly funding pension liabilities through employer contributions. This thought piece sets out some of the key drivers and considerations for examining contingent security.

Now that A day has been and gone, what should we do next? Whether our A day changes were compliance oriented or of a more visionary nature, the benefit package must be kept under review to make sure that it remains fit for purpose and facilitates the achievement of broad corporate goals. However, having got the benefit design sorted, it might be worth spending some time considering the delivery mechanism.

These web casts examine executive pensions in the post A day environment. In the post A day world, pension choices for senior executives have become far more complex. In these web casts we look at this from three perspectives: the employer, the Remuneration Committee and the individual.

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In this Rewarding Conversation Alan Pickering is joined by Graham Mitchell to look at the new secondary market for pension liabilities. Who is buying, who is selling and what are the implications for employers and trustees?

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Corporate Pensions Briefing – 20 May 2008 – Feedback report (PDF - 272KB)  

Watson Wyatt’s Corporate Consulting Group held its latest Corporate Pensions Briefing on 20 May 2008, exploring three topics with particularly high profiles for corporate sponsors at the moment: mortality – analysis and market options; section 75 and revised clearance guidance; and enhanced transfer values (ETVs). The briefing was attended by 43 delegates, comprising senior finance, treasury and pensions executives from companies with defined benefit (DB) pension schemes and their advisers.

Pensions buyout and settlement market – Feedback report (PDF - 290 KB)  

Watson Wyatt’s corporate consulting group seminar on the settlement market held on 26 March 2008 was attended by nearly 100 senior representatives of companies with defined benefit pension schemes. This factsheet summarises survey voting results gathered during the seminar, and compares them with the corresponding results from the previous seminar a year ago.

Corporate Pensions Briefing - Feedback report (PDF - 1.1MB)  

Watson Wyatt's Corporate Consulting Group seminar held its latest Corporate Pensions Briefing on 12 December 2007, exploring the experiences of 2007 and considering what pension scheme sponsors can expect from 2008. The briefing was attended by 33 delegates, comprising senior finance, treasury and pensions executives from companies with defined benefit pension schemes. This factsheet summarises the headlines from the seminar and the survey voting results gathered during the seminar.

Pensions issues in M&A - feedback report (PDF - 234 KB) 

Watson Wyatt’s corporate consulting group seminar on pension issues in M&A (4 December 2007) was attended by 65 delegates, comprising senior finance, treasury and pensions executives, and their legal and financial advisers.

Executive pensions in the post A day environment (PDF - 1.05 MB) 

Companies now face a much more complex picture when managing their pension schemes and remuneration strategy. Similarly, executives are likely to need to be much more active in monitoring their own financial affairs to plan for a comfortable retirement. We held a seminar on 1 May 2007 to look at this area. It was attended by 50 representatives from major companies. We asked delegates a number of questions about how they are handling the issues involved. Their answers, together with responses from a further 15 companies, are summarised in this document.

FTSE 100 Defined Contribution Pension Scheme Survey (PDF - 1.85 MB) 

This survey has been conducted with the companies that constituted the FTSE 100 index as at 31 March 2006. It has been running for three years now and is beginning to reveal some trends in DC provision and design. Organisations may find the survey results and the trends behind the changes useful in influencing their own DC designs.

Pension Plan Design Survey 2006 (PDF - 872 KB) 

Pension plan design is headline news as the twin pressures of cost and risk continue to bear down on defined benefit pension plans. The move to defined contribution plans is well documented, but key questions about the trends in pension provision still remain. Some of these questions are examined in Watson Wyatt's seventh pension plan design survey carried out in January 2006. The survey is focused on larger organisations; of the 159 respondents, 75 per cent had more than 1000 employees in the UK, including 23 companies who are members of the FTSE 100.

Flight Plan (PDF - 2.83 MB) 

In Flight Plan, we define three building blocks for investment: effective LDI, cheap beta and reliable alpha. We suggest that successful use of these building blocks in creating value is directly related governance and suggest how governance can be improved. Funds with the strongest governance will have the greatest ability to exploit the opportunities. We put forward three indicative solutions for funds of different governance levels and explore the implications for the industry.

The new pensions framework 

'The new pensions framework' consists of a series of factsheets outlining the requirements of the Government’s new pensions legislation. These are organised into a number of themes: Plan Design, Governance, Finance and Investment, Administration, Winding up, and Communications. Owing to the complicated nature of the legislation and the myriad variations of pension arrangements, the factsheets do not attempt to cover every detail, merely to summarise the provisions so that those responsible for schemes can identify those on which they will need to take action.

Changing lanes - doing risk better (PDF - 1.44 MB) 

The understanding and management of risk remains a difficult subject for both the trustees and the sponsor and, increasingly, requires significantly enhanced levels of expertise as the complexity of pension fund management increases. In this paper, we argue that pension funds can position themselves significantly better for the future. Changing lanes challenges current views of risk-taking in pension funds, seeks to make risk management more explicit, and offers a number of suggestions as to how we might do things differently in future.

Boardroom briefing: corporate pensions - issues for 2008 

2007 saw pension scheme risk management move up the corporate agenda. In this briefing we address the challenges and opportunities this will bring to you in 2008.

Global survey of accounting assumptions  

The 2006 Global Survey of Accounting Assumptions for Defined Benefit Plans is the 17th annual survey of assumptions applied by major corporations for their defined benefit plans around the world.

Pension Protection Fund 

The Pensions Regulator