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Case Study Three

The background: our client and its situation

We were appointed as sole trustee of a pension scheme where there had been a history of difficult relationships between the trustees and the employer – all understandable but embedded in history. The employer is a large international industrial business, private equity owned, which has recovered from a challenging period to become stable and profitable.

The issue and our goals

  • The valuation 15 months’ deadline was almost upon the Scheme
  • The cost of running the Scheme was disproportionate to its size
  • A number of key issues such as equalisation, balance of powers and indexation had not been resolved
  • The investment strategy was not fit for purpose
  • The employer structure was complicated and unwieldy

How we manage the issue 

  • We engaged on a real time basis in contrast to the previous board which had stacked up issues from one trustee meeting to the next
  • We focussed on the important issues and shelved a lot of the inconsequential noise
  • We created a budget for the operation of the scheme and managed costs using a simple approval system

The Result

  • The valuation was completed within the 15 months’ deadline for the first time in three valuations. A three-year recovery plan was agreed leading to self sufficiency
  • The cost of running the scheme has been more than halved, saving a substantial six figure sum
  • Key legal issues have been clarified and corrective action taken by detailed work with the existing legal adviser
  • An investment strategy has been agreed to reduce volatility, hedge unrewarded risks and deliver returns consistent with the covenant strength and the move to self-sufficiency
  • Through an FAA we have simplified the employer structure, improved the covenant strength and reduced the PPF levy


Overall the relationship with the employer has moved from a combative nature to a constructive one with respect between the parties