We can assist companies in negotiations with Trustees to secure a fair and realistic funding valuation and recovery plan.
Reviewing funding valuation assumptions is a core skill of our business. We carry out detailed research into the investment market conditions used for setting actuarial assumptions, and analysis to support the more detailed approaches that are more typical for larger pension schemes.
Working with the Deloitte audit team we review around 400 sets of assumptions each year proposed for pensions accounting purposes and collect these in a database. From this we gain valuable knowledge of the range of approaches to setting for example mortality and inflation assumptions across the pensions industry.
Our corporate, due diligence and audit work gives us a broad view of the assumptions used by a variety of different funds, and the recommendations of a range of actuarial advisers. In addition we are able to consider other publicly available benchmarks, including analyses of funding assumptions published by the Pensions Regulator.
The Trustee’s assessment of the company’s sponsor covenant will be the foundation of any possible recovery plan. We work with companies to discuss the covenant, and how to best position this with the Trustees. We can include covenant review specialists as appropriate to access their skills and knowledge.
To help facilitate company negotiations with Trustees, we have a range of proprietary modelling tools to help understand the investment risks to which the company is exposed, and the extent to which adjustments can be used to mitigate risks whilst achieving the desired level of expected return.
Additionally, we are able to provide assurance services for pension schemes which include understanding of companies' risk and control environment and testing the relevant systems and processes. These services can be provided jointly with existing internal audit resources or as an outsourced solution. Learn more about the extent and benefits of our pension assurance services.