Deloitte can offer a series of solutions to help companies fund the deficit in their defined benefit pension scheme and manage their commitments to the pension fund on an ongoing basis. Since 2010, more than £5bn of pension schemes’ deficit has been funded using asset backed funding structures. Deloitte are established as clear market leaders in this field, having implemented over 20 PFP structures (65% of publically announced ABCs by value) for clients including John Lewis, J Sainsbury, Whitbread, ITV, Alliance Boots, TUI Travel PLC, Marks & Spencer and Centrica PLC). Our approach is to work closely with companies to identify the funding solution that fits most closely with their wider financial objectives. What we offer is bespoke and can range from a simple cash injection to the pension fund, to our Pension Funding Partnership (PFP) solution, that uses non-cash assets to finance pension contributions in line with HMRC's Asset Backed Contributions ("ABC") regulations.
We offer a range of other options, and identify the one which fits most closely with a company’s risk appetite, cash profile and overall business objectives. These options include:
In each case we will help the company understand all the options available and analyse those against the company’s business objectives.
Groups that have non-cash assets could consider using these to facilitate pension scheme funding, reduce cash contribution requirements and provide trustees with improved security for members’ benefits.
Effectively, corporate assets are used to collateralise a partnership with the pension scheme, providing the scheme with a valuable investment. A range of assets can be used, including:
The evolving ABC market - Pension funding solutions
ABCs: The new landscape