In the right circumstances, some pension schemes might choose to purposely run-on and extend their journey to ultimate buy-out. The question is why would sponsoring employers want to? We have developed an innovative solution called FM+ which is designed to answer that question.
More and more defined benefit pension schemes are finding themselves in the wonderful position of being well funded and able to afford an insurance buy-out transaction. Being in such a position is indeed great news, but it also opens up a number of options for well-funded, strong-covenant schemes, with sponsors willing to remain engaged for a longer term.
We believe our FM+ solution, developed in co-operation with C-Suite Pension Strategies, creates a window of opportunity for certain pension schemes. In the right circumstances it could generate a surplus, beyond a buy-out measure, which could be further built up and regularly released, for the benefit of pensioners, current employees and the sponsor - all with the support of the trustees.
In the video below Iain Brown considers the opportunity and provides an overview of FM+
In the video below Vicky Casebourne focused on the challenges and opportunities for trustees