UK - Actuarial consultant Lane Clark and Peacock (LCP) is looking to develop a packaged service for pension funds which would transfer all management responsibilities from the trustee board to the consultancy.
Essentially, LCP would assume the traditional role of the pension fund manager, overseeing the administration, payment of benefits, collection of contributions, compliance and legislative requirements.
Actuarial advice would be one component, and Bob Scott, partner at LCP, said a fully streamlined service might also include strategic investment advice.
He said the firm believed such a proposition would be “increasingly of interest” to pension funds and plan sponsors.
“Some companies would rather not devote valuable time and expense to what is effectively now just a legacy,” he said. “Ten years ago the pension scheme was an integral part of the overall package, used to attract and retain staff. Now the legacy only applies to a fraction of their staff, they want to run it in a cost efficient way with minimal involvement.”
Although still in the embryonic stage, Scott said the pricing of such an offering would most likely include a fixed price for a core service, with extras.
“It effectively means delegating certain day-to-day decisions to us, and we would report to the trustees,” he said. “I can see a demand for that sort of service.”
Other consultants have also made moves along these lines, with Punter Southall launching its CompleteDB service last year, which provides full compliance services across the range of actuarial, administrative and investment requirements for a fixed cost.
Gareth Jones, principal at Punter Southall, said: “We have developed a packaged product whereby people can have all their pension services provided under one roof, and for a charge that is expressed as a percentage of the assets under management.”
“It’s a bit like stakeholder pricing for occupational schemes, and that does take away worries that some schemes have about the unpredictability of advisers’ costs.”
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