Ongoing Defined Benefit Schemes
These are the traditional final salary schemes which are invariably closed to new entrants, and usually to future accrual, but are not winding up.
Although many might consider final salary schemes a thing of the past, they are far from extinct, and their legacy will extend far into the future. With liabilities to pay for perhaps another forty or fifty years, together with the difficulties facing many sponsors, these schemes will continue throw up significant Trustee challenges for a long time yet.
Many scheme sponsors will of course be delighted to be rid of these liabilities as soon as possible, while others take a more paternalistic approach. Either way, most have at least half an eye on an exit strategy perhaps considering full or partial buy out or liability reduction exercises. This may well be against the backdrop of a significant deficit and difficult trading conditions.
Some of the benefits that ITS can bring to the Trustee bodies of these schemes include:
- Confidence of impartiality to scheme members and sponsor
- Add experience to a new Trustee board
- Work around situations of actual or potential conflict of interest
- Lead Trustee body objectively through funding negotiations
- Ensure advisers are giving proportionate, timely and cost effective advice
- Chair trustee body if required
- Act as scheme secretary