Investment and de-risking for pension schemes

Investment and de-risking for pension schemes

One of a trustee's key roles is to decide upon and then implement the investment strategy for a pension scheme.

This is something investment advisers and investment managers will help the trustees to mange. However, there are certain legal aspects to this which we can assist you with. 

There are specific statutory obligations regarding investment duties which the trustees must fulfill. We can advise on these and review the statutory documents for you, such as the statement of investment principles. 

Additionally, we will help by reviewing terms and conditions put in place by investment managers and investment advisers; and in particular, we can draw the trustees' attention to any unusual provisions limiting liability or seeking to impose any liability on the trustees. 

As pension schemes mature, many clients are looking at strategies to buy-out members' benefits through insurance company annuities. This may take place as a general scheme exercise and not necessarily in relation to winding-up the pension scheme.

A particular approach some schemes wish to take - with the support of the sponsoring employer - is to buy insurance company annuities as pension scheme investments which meet the liabilities for pensions.

Whether structured as a buy-out or buy-in, this exercise can require significant and detailed due diligence. Working with your consultants, we can assist by reviewing policy terms; providing summaries of the benefit structure and any unusual benefit provisions in order to obtain quotes, and advising you on all legal aspects of the transaction . 

Work highlights

  • Advice to trustees on their statutory investment obligations
  • Review of fiduciary management agreements
  • Preparation of benefit specifications on a buy-in policy
  • Commentary on benefit provisions and confirmation of precise benefits provided