Providing benefit options with appropriate education and support enhances choice and flexibility for members and means they can make better retirement decisions. It also provides an effective tool to help companies and trustees improve their scheme’s funding level and reduce costs and risks. Options include:
- Pension Increase Exchange exercises, which involve offering members, either at retirement or to those who have already retired, an uplift to their starting (or current) pension in return for the surrender of future annual increases.
- Bridging Pension Options that allow members to opt for a larger scheme pension at retirement by exchanging part of their lifetime pension for a temporary (higher bridging) pension payable until State Pension Age (SPA). The aim is to bridge the gap in income until their State Pension becomes payable.
- A Retirement Transfer Option, which involves actively engaging and supporting members to help them understand the options they have at retirement, including the option to transfer to a Defined Contribution arrangement.
- Enhanced Transfer Value exercises, where deferred pension scheme members are provided with an enhancement to their standard transfer value.
- Other options such as running bulk early retirement or trivial commutation exercises.
Trustees and companies may wish to consider one or more of these options for their members. Provided such options are communicated clearly and fairly, and members are supported so they can make informed decisions which suit their particular circumstances, the result can be a ‘win’ for all concerned.
We have a team of experienced and dedicated member options experts, including specialist project managers with a track record of delivering to time and budget. We have a thorough understanding of the implications of UK pensions law, the industry Code of Good Practice and the Pensions Regulator’s statement on incentive exercises. We also have in-depth understanding of financial advisers and their advice models, as well as communication specialists with years of experience in explaining complex pension issues to individuals.
Most importantly, we would be pleased to work with you to successfully design and implement the exercise which is right for the company, the trustees and the scheme’s membership.
