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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.
Cost benefit analysis
Barriers to change
2 3 4 5 6 7 8 9 10
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
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 future changes
Governance Independent 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
Savings Over the 10 year period to 2030, the employer could expect to save £3.1m It would take about 1-2 years to recoup the project costs
Investment and asset transition
Proof of concept
DC provider selection Consult
Engage Trustee approval Implementation Governance
Proof of concept and design objectives
Assessment process Implementation
Scheme go liveGo/No-go Go/No-go
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
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
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
Richard Birkin Head of DC Pensions Advisory
Tel: 0121 227 3544 firstname.lastname@example.org