The background 

Following HCA’s Sector Risk Profile 2014, pensions was identified as a key risk for Housing Associations. As a result, Southern Housing Group’s board needed a pensions strategy in place covering all its pension arrangements. Southern participated in SHPS and, following the review,
the Board wanted to consider its options regarding its participation in SHPS. It was concerned about the relative funding of SHPS when compared against its own trust based defined benefit pension scheme.

Our solution

We provided advice on the options available to Southern, including the benefits and drawbacks of each. The Board decided to go forward with a bulk transfer to isolate their SHPS deficit. TPT gave approval for the transfer, but this was subject to Southern and TPT reaching agreement on
the commercial terms. From our experience with previous transfers out, we were able to lead these negotiations and secure significantly better terms than were originally offered by focusing on the points where we know we can reach an improved position. LCP were also able to help
draft the Transfer Deed, giving Southern greater control over the process and final terms.

The outcome

Southern successfully transferred out of SHPS into a new section of its existing Scheme, outside of TPT. This has protected them from the actions of other SHPS employers, whilst simplifying the governance required to manage two separate schemes.