Independent, Professional Trustee Chair

Defined benefit scheme in the process of winding-up  

When the Scheme sponsor's UK business operations were significantly downsized and the Sponsor, which is a multi-national company, set the objective of winding the Scheme up, it became desirable, from both cost and risk management perspectives, for the Sponsor to appoint an Independent, Professional Trustee to help manage the Scheme, which is valued at about £40m.

Within this role, in addition to the onerous Trustee responsibilities, we work with the German based client and co-lay Trustee, helping them understand the UK pension environment and hence manage the work to be undertaken.  Together with the Scheme's advisers, over whom we have management oversight, we have undertaken scheme benefit and investment changes and de-risking exercises, including Enhanced Transfer Value (ETV) and Flexibility at Retirement (FaR) exercises, designed to balance and best meet to the needs of Scheme members and the Scheme Sponsor, while complying with all legislation and regulatory guidance. We continue to work to finalise the Scheme buy-out and wind-up during 2019 using project management tools and clear communications to all those involved, especially the scheme’s members.

Within this role we have responsibilities relating to Scheme expenses and budgeting and aspects of Pension Scheme Management.  We have also facilitated the setting up of a new Defined Contribution Scheme and ongoing benefit provision through our trusted adviser network.  

Investment Manager review

defined benefit scheme requiring investment manager

When the Trustees of a Pension Scheme decided they wished to explore the possibility of appointing a new Investment Manager, they asked us to manage and prepare all the work on their behalf.  After learning about the Scheme and the Trustees’ and sponsor’s objectives, we prepared an Invitation to Tender (ITT) document for agreement and, working with all the parties involved, identified and agreed eight potential service providers.

Having worked with these potential service providers and reviewed their returned ITT submissions, we invited the four providers whom we believed provided the best proposals to present to the Trustees and Sponsor, after which the preferred provider was appointed. 

Lindis Consulting then helped oversee and manage the transition from the old to the new Investment manager ultimately resulting in a significant reduction in Investment Manager expenses; clearer communications; much reduced Trustee and Sponsor time spent reviewing Investment issues and, most importantly, significantly reduced volatility of the Scheme's Funding and Accounting positions, all of which were objectives set for the review.

This work was undertaken for around half the cost of the main employee benefit consultancies and without conflict, because Lindis Consulting does not provide Investment Manager services.  

Strategic Pension Scheme review

Work with Trustees and Sponsor on future plans

Within the scope of this project, we worked to understand the objectives and constraints of the Scheme’s Trustees and Sponsor and used this knowledge, along with our internal knowledge and expertise, to propose a strategic plan designed to best meet the business’ and Scheme’s needs and requirements. We used tested strategy tools and research to consider the Pension Scheme, and its members, many of whom are still employees, within the context of the Sponsor's overall business. In undertaking this task we worked with the Scheme Trustees, company directors and other advisers, to gain an understanding their objectives and concerns.  Based on this understanding, further research and our extensive knowledge and experience of dealing with many Pension Schemes in many business areas over many years, proposals for managing the Scheme were clearly set out with proposed actions, a time line and the rationale discussed and improved upon.  We are currently working to implement the plans agreed managing and reporting on progress, including working with the Trustees’ and Company’s external advisers.

The main benefits to the company of this approach are that it will provide clarity of purpose and save the director’s time, which is very limited, in a way in which they retain complete control of all aspects and without using consultants who are potentially conflicted due to the other services they provide and for whom this work would not be a priority.

Company Strategic Review

Work with company directors and advisers on plans

As with the Pension Scheme example, it was important in this case that company leaders keep an eye on and understand the future direction of their business and the environment in which it operates.  In this case, the day to day pressures and workloads had resulted in the company losing market share in one of its major markets essentially through technological and supply chain advances they had not anticipated. This disruption resulted in increased competition and pressure on costs in a way that was difficult for the business to react to quickly, resulting in them losing significant contacts and revenue.

Lindis Consulting is working with this client and its other advisers to implement a strategic plan whereby the directors understand the business’ strengths and weaknesses and the wider business environment within which it operates, including the current and potential sources of competition. Armed with these insights we are working to implement a series of changes and improvements to the business’ operations and customer facing interfaces designed to first stabilise and then grow the business based on the insights gained from the strategic review.   

The company directors in this case benefit from our knowledge and experience, especially through Terry’s MBA and associated network, and from our work with other businesses which enable us to consider solutions the directors had not previously explored.