UK - Schemes with liability- driven investment strategies could shave one-third off their Pension Protection Fund levy payments by doing a "bespoke" analysis of investment risk, LCP says.
The consultant said the new levy formula, which focuses in part on investment risk, delivers opportunities to reduce the amount payable to the PPF due to a more detailed analysis of LDI assets.
LCP partner Adam Michaels said: "We are urging trustees and sponsors of pension schemes to consider whether they are doing all they can to minimise their levy payment.
"Schemes with a material levy that use LDI funds or other derivative-based approaches could achieve significant savings by performing the bespoke analysis of investment risk. However, even schemes with long-dated gilts may benefit significantly."
LCP said it was already working with its clients, which include Hilton Worldwide, Rothschild and UBS, to identify annual savings which could run into hundreds of thousands of pounds for schemes.
The PPF announced its new levy for 2012/13 last week. It uses a different formula which gives a weighting to investment risk.
"The streamlined approach to bespoke analysis that we have developed further supports our commitment to save our clients money through cost-effective advice," Michaels added.
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