Pensions Stability Thought Leadership
Pension schemes are being run with far greater risk than is necessary, and there is an opportunity to create a more stable pensions environment for sponsors and trustees.
Based on extensive modelling, we believe that the purist concept of 'self-sufficiency' is very hard to achieve within the environment of UK pensions legislation and the only way that a sponsor can be sure of not needing to pay more contributions is to over-fund the scheme substantially.
For schemes that plan to run for many years, the use of other vehicles is likely to be necessary to reach stability. Some form of alternative financing arrangement may be an attractive option. For most schemes, bulk annuities still represent the best way to extinguish liabilities. But while they wait for buyout, schemes should still use a range of tools to reduce risk considerably.
A key factor in whether a strategy works is its implementation. Many schemes would benefit from making changes to their operational structure to ensure that they effectively implement de-risking ideas and create financial stability.
This combination of operational and funding change brings Pensions Stability - and leads to increased confidence in DB schemes.
Read our whitepaper on Pensions Stability, or our shorter guide or infographic to understand why Pensions Stability should be the objective for pension schemes, and how to achieve it.
Aon's Governance Challenge - the results
Our 'Governance Challenge' comprises 20 questions, designed to help DB schemes evaluate their own governance. Here, we summarise the results from all the completed challenges to date. The aggregated responses provide an insight into current governance practices, priorities and concerns.
Health-check, Operational Efficiency
A guide to Pensions Stability
Pensions Stability White Paper - Turning theory into reality
Pensions Stability: Everything you need to know in 6 simple steps
Governance: Delivering Pensions Stability Faster
This paper summarises our research into pension scheme governance and delivery models.
Time to focus on getting things done
How should a pension scheme be organised in order to get the best possible chance of carrying out the tasks necessary to reach Pensions Stability?
The Pensions Stability Series: 1. What are you aiming for?
The first step in achieving stability in your defined benefit pension scheme is to define what stability means, and set a target that meets that need. This paper summarises the targets that schemes are typically using, and why.
The Pensions Stability Series: 2. Reconciling stability and surplus
To provide security for members and certainty for sponsors often means overfunding a scheme in order to provide a buffer against adverse experience. But trapping unused cash in the pension scheme isn't efficient, so in this paper we consider some of the alternatives.
Ten Top Tips for Implementing Change to achieve Pensions Stability
Recently we held a seminar in association with Pensions Age on the subject of “Implementing Change to achieve Pensions Stability”, as part of our wider focus on pension scheme governance and effective decision making. We explored some of the common barriers to achieving effective governance, and during lively table discussions we encouraged the audience to share some of the hints and tips that they have used to successfully overcome some of these obstacles.
Pensions – getting more from your time and your budget
All too often senior company finance representatives and trustee boards become embroiled in the delivery and lower level decisions associated with running defined benefit pension arrangements, reducing the time available to focus on strategic direction and achieve meaningful results. How can you get more tangible and impactful results from the resources spent on pensions?
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