case study

Agreeing assumptions for the actuarial valuation and investment strategy

the challenge

The trustees of a final salary pension scheme were being asked by the overseas parent company to adopt less prudent assumptions for the actuarial valuation and investment strategy than they had previously used.  In return, the overseas parent was willing to offer a guarantee for a defined period – although this would be reduced by the annual contributions made to the scheme by the UK company.

our approach

We discussed the trustees’ concerns, and those of the pensions advisers, who preferred a less risky approach.  Following our discussions, we negotiated a guarantee from the overseas parent company that gave the trustees comfort and was also acceptable to the UK company.  We also advised on whether the guarantee would be enforceable under non-UK law.

the results