DC change projects · 1 £3,500,000 £3,000,000 £2,500,000 £2,000,000 £1,500,000 £1,000,000...

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DC change projects As one of only a very small number of truly independent DC advisers that exist in the UK today, we are able to provide clients with clear, unbiased advice supported by extensive provider market research. isio.com

Transcript of DC change projects · 1 £3,500,000 £3,000,000 £2,500,000 £2,000,000 £1,500,000 £1,000,000...

Page 1: DC change projects · 1 £3,500,000 £3,000,000 £2,500,000 £2,000,000 £1,500,000 £1,000,000 £500,000-£500,000 £0 2345 67 89 10 YEAR SAVINGS CUMULATIVE SAVINGS Typically, on

DC change projects

As one of only a very small number of truly independent DC advisers that exist in the UK today, we are able to provide clients with clear, unbiased advice supported by extensive provider market research.

isio.com

Page 2: DC change projects · 1 £3,500,000 £3,000,000 £2,500,000 £2,000,000 £1,500,000 £1,000,000 £500,000-£500,000 £0 2345 67 89 10 YEAR SAVINGS CUMULATIVE SAVINGS Typically, on

Cost benefit analysis

Barriers to change

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YEAR SAVINGS CUMULATIVE SAVINGS

Typically, on any DC change exercise from a trust based arrangement, the following

areas require initial investigation as to whether they are a clear

barrier to change, whether there are any mitigations to

manage them and document for audit trail purposes.

Detailed cost/benefit analysis to confirm financial case

for change and benefits to employer and members.

Gap analysis against key objectives to identify most

suitable DC delivery vehicle.

Trust Deed and contracts of

employment

Cash protections

Early retirement protections

Impact on ancillary benefits

Hybrid structure trapped surplus

Ex-DB member PCLS conversion

Links to DB AVCs

Impact on member charges

Asset transition costs/impact

Key features of different DC vehicles

MASTER TRUST CONTRACT BASED

Cost of futurechanges

Operationalcosts

Reportingrequirements

Leaver options

GovernanceIndependent scheme specific High level book of business

Deferred pot Personal arrangement

Cost borne by trustee/company

Borne by trustee/company

Cost borne by provider

Borne by sponsors Borne by member

Borne by provider/member

Potential savings from changing the DC vehicle - no future employer subsidy paid by the Company

SavingsOver the 10 year period to 2030, the employer could expect to save £3.1mIt would take about 1-2 years to recoup the project costs

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Indicative timeline

Isio credentials

Investment and asset transition

Proof of concept

Design objectives

DC provider selection Consult

Engage Trustee approval Implementation Governance

Transition

Proof of concept and design objectives

Assessment process Implementation

Scheme go liveGo/No-go Go/No-go

Future governance

The default investment strategy is a key criteria

as it directly impacts on a member’s DC pot value at retirement. Isio’s specialist transitions team oversees

asset transfers, thereby managing risks and costs

to members.

Previously KPMG Pensions, our team has over 25 years of

pension market experience with a multi-disciplinary

pension offering covering: DC and DB consultancy, actuarial

administration, investment, pensions tax, communications

and assurance. We have a team of over 500 pensions

professionals across the UK and have a track record of absolute

commitment to quality of advice and service.

Independence – we are independent of all providers and investment managers and are not a product provider in our own right, unlike some of our competitors who now promote their own products.

DC experience – we work with many DC schemes with total assets under advice estimated to be in excess of £17 billion. This has given us experience of a wide range of projects for a wide range of clients.

DC investment and asset transition experts – we have an in-house team of DC investment and asset transition experts that carry out research into the DC provider market, forming a view on, amongst other things, the quality of the off the shelf default strategies available and capability for the transition team for each provider.

Market knowledge – our consultants liaise directly with pension providers i.e. no central research team. This means our consultants are up to date and fully briefed on market developments. It also means that we have well established provider relationships.

Ideas and innovation – we are not compromised by our own products. We have developed market leading approaches to scheme governance and assessing value for members (a key focus from the Pensions Regulator). Our deep understanding of the Regulatory framework helps us to build and innovate.

Investment - key considerations

Suitability of default investment strategy

Fund range and alternative lifestyles

Sole or dual governance

Environmental, social and governance considerations

Key risks in an asset transition

Minimising transaction costs as far as possible

Managing market exposure as far as possible

Reducing the operational risks present

Completing the transfer in a timely manner

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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. 2020

Isio Group Limited is an Appointed Representative of KPMG LLP which is authorised and regulated by the Financial Conduct Authority FRN 210513

Contact

Richard BirkinHead of DC Pensions Advisory

Tel: 0121 227 [email protected]

isio.com