The background

After reading LCP’s Chart your own course report, which sets out a blueprint for ​journey planning for pension scheme trustees, the pensions manager of a scheme which was not an existing client got in contact on behalf of the trustees.
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The trustees wanted to understand the key risks facing their scheme, and in particular whether the strength of their covenant had sufficient capacity to underwrite the level of investment risk being run.​

Our solution

We undertook a bespoke assignment collaborating with the trustees, their sponsoring employer, scheme actuary and fiduciary managers to provide an independent risk review, and provide our opinion on whether the scheme was likely to be “fast track” or “bespoke” per the regulatory direction of travel. ​

The result

Our advice helped the trustees to explain the importance of approaching risk in an integrated way to their sponsor. This set the scene for the agreement of a contingent funding arrangement, which has allowed the scheme to run higher levels of investment risk, conserve cash for the sponsor and reduce the likelihood of regulatory intervention at the upcoming valuation.