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Pension Plan Strategy and Design

Most employers with an open defined benefit scheme have re-examined their existing arrangement in recent years, as costs have been driven up by a challenging economic environment, longer life expectancies and more regulation. At the same time, the UK pensions landscape has evolved, introducing new, more modern opportunities for providing pensions. At WTW, we can help you evaluate all of the options available to you in order to find the right way forward.

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Over recent years, the increasing cost and volume of regulation and legislation, longer life expectancies and falling real interest rates, amongst other factors, have all resulted in a significant number of employers reconsidering the design of the defined benefit (DB) pension arrangements provided to their employees. The move from private sector DB pensions to a defined contribution (DC) basis is well documented and continues at pace, being driven by this changing environment.

The challenge facing employers who have not yet moved from DB is what type of pension arrangement to provide and how that fits in with their broader financial wellbeing thinking. Their chosen arrangement must be sustainable, cost effective and avoid exposing the sponsor to unacceptable financial risks. At the same time, it should be valued by employees, be sufficiently transportable to accommodate the needs of a modern-day workforce whilst providing an adequate income in retirement. The evolution of the UK pensions landscape has provided a helpful platform for employers to introduce positive change - most notably the now well utilised flexibilities available through DC arrangements and the, more recent, development of collective defined contribution (CDC) vehicles.

At WTW we recognise there is no one-size-fits-all solution, and we have vast experience of developing tailored solutions for employers irrespective of the size of their UK workforce. We recognise that every client is different, whether that be by your history, the unique features of your organisation or the current and future challenges you will face.

We can work with you at all stages of the process, from the due diligence and design phases right through to communication and implementation.

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