Bespoke Plan Design

An Actuarial Case Study

Recently one of our clients, a large financial services institution commissioned us to review the benefits being offered to its employees and the underlying structures of its pension schemes.

The company's principle objectives going into this exercise were to:

• Reduce risk to an acceptable level
• Cap the cost of providing the benefits at current levels

As a result of this review a hybrid type arrangement was put in place which addressed these objectives. This new hybrid plan capped the DB benefits at a certain salary level, with DC benefits provided above that threshold.

This solution allowed the company to provide their employees with a certain level of guaranteed benefits while limiting the potential volatility of a higher level of defined benefits. It also allowed them to plan financially for the future with increased certainty as the level of control over scheme liabilities was significantly increased.