We provided advice to the trustees and sponsoring employer of a defined benefit scheme with approximately 1000 members.

The circumstances of this scheme were unique, as most of the members were entitled to small lump payments and only a few were entitled to a small defined pension. In addition, many of the members could not be traced, making any changes to the scheme that required member consent difficult to implement.

The employer was becoming increasingly concerned as the costs were becoming disproportionate to the actual benefits being provided by the scheme.

We came up with an innovative solution, which was to transfer all the members to a defined contribution scheme. This was achieved using a dedicated portfolio of gilts so that we could accurately predict future investment performance and guarantee that members would receive the same level of benefit that they would have received under the defined benefit arrangement.

This satisfied the demands of the trustees and the scheme actuary and sidestepped the need to trace all members. Crucially, it also cut future servicing costs dramatically by removing the need for actuarial valuations, PPF levy and other costly requirements.