Destination Endgame

Ampersand Destination Endgame Redington DB Pension Schemes

DB schemes need clearer frameworks to help navigate increasingly complex endgame environment

Redington has launched ‘Destination Endgame’, a whitepaper to provide schemes with a framework to help navigate an increasingly complex environment of endgame options and products.

A raft of regulatory, competitive and market developments have drastically altered the environment for the trustees and sponsors of defined benefit (DB) pension schemes, offering substantially more options for how to approach the “endgame” of running off the scheme and delivering pension promises to members.

While increased choice is positive, we argue that what schemes now need is a decision-making framework to assess the different options available against each other fairly, so they can ensure they’re making the best choices for members.

A number of high-profile corporate failures including Carillion and House of Fraser, coupled with better-than-expected funding level progress since 2016, has highlighted the need for schemes to act swiftly when it comes to making the right choices and implementing de-risking strategies.

We have seen a substantial increase in the number of schemes placing endgame planning as the number one priority for trustee boards and investment committees, with 40% of clients considering this.

The space has also seen entrants from a number of new providers and products, including more providers of bulk annuity buy-in and buy-out products, new cashflow-driven investing solutions and alternative consolidation vehicles.

Dan Mikulskis, Head of DB Pensions at Redington, said: “The choices facing trustees looking toward the endgame are more complex than ever. While there are plenty of products that might be right for them, what’s often missing is the right framework to make the key decisions.

“In a landscape full of products with significant commercial value, truly independent and unbiased advice has never been more important.”

Marian Elliott, Head of Integrated Actuarial at Redington, said: “Given these developments we believe the time is right for trustees and sponsors to put some serious thought into developing their endgame strategy. In our new paper we have created a practical roadmap to guide schemes through the various options and products available, helping decision makers adjust course as the environment changes.”

Are you a trustee of a DB scheme? Has your funding level improved in the last few years? Are you thinking about your endgame options and how to get there?

Our research will help you develop the frameworks to put an endgame plan into practice.

Destination Endgame is available to download here. 

Author: Dan Mikulskis

Dan heads up Redington’s DB Pensions business, having joined the firm in 2012. In this role Dan is responsible for overseeing and steering a business that provides investment advice to DB schemes, on both a retained and project basis, with over £350bn in total assets and pay the pensions of nearly a million underlying members. Dan’s focus is growing Redington’s market share in this area, with the end goal of helping more members reach financial security in retirement. As a member of Redington’s investment committee Dan also has joint oversight for the investment strategy process, from investment modelling assumptions to fund manager recommendations. Previously Dan held derivatives-trading focused roles at Deutsche Bank in Sydney, Macquarie bank and a macro hedge fund. Dan began his career in the Investment Consulting business within Mercer in London, where he qualified as a Fellow of Institute of Actuaries in 2007, and where he became a member of the Financial Strategy Group. Dan holds a BA(Hons) in Mathematics from the University of Cambridge.

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