Liability management for Defined Benefit schemes

Defined Benefit scheme liabilities can be worrying for today's employers

Uncertainties around Defined Benefit pension scheme liabilities can be a source of considerable anxiety for employers. Indeed, many employers prefer to spend any spare money reducing those liabilities, rather than adding extra funding to the scheme.

This makes sense because of the prudent approach trustees are expected to take when funding pension schemes. It means that fair offers can be made to members that give a saving compared to the value placed on the liabilities for funding.

Pensions are complicated and any liability management exercises need to be explained clearly to scheme members. If scheme benefits are reshaped or transferred out, members cannot be expected to make decisions without access to clear and comprehensive information.

How can First Actuarial help?

We can advise on the range of options available to you when managing Defined Benefit scheme liabilities.

We’ll listen to your workforce and take full account of their perspectives, adding and discarding options accordingly, always balancing the needs of your members with your own objectives.

We can help you manage your liabilities for a buy-out with

Enhanced transfer exercises

The amount of money needed to buy out a member with an insurer is higher than the amount held by schemes for their actuarial valuation, for example, and much higher than the transfer value. This can provide considerable scope for boosting transfer values to members, at a level that is still cheaper than buying-out.

Early retirement exercises

Because there is a saving when people swap pension for a cash lump sum, insurers usually assume that members won’t take any cash at retirement. So if your members retire and take cash before buy-out, this reduces the cost.

Pension reshaping

There are numerous ways that pensions can be reshaped to bring down the cost of buying-out pensions. This might involve swapping pension increases for a higher pension, for example, or offering bridging pensions.

Why choose First Actuarial?

We’ll guide you through the complexities of liability management exercises. With our extensive experience, we can identify and explain all the risks involved in each option along with the likely savings. We’ll help you design a programme that works for you and meets your objectives.

Importantly, we are an ethical firm. By the end of a liability management exercise you’ll have achieved your objectives while treating your members fairly.

Get in touch

Get in touch to find out more about our liability management services.

First Actuarial provide us with a first class service in respect of actuarial advice and administration services. The team at First Actuarial are extremely professional and are focused on delivering excellent results for such services. We would have no hesitation in recommending their services.

- Angela Treen, Finance Director

First Actuarial case studies

Oil and Gas Industry

Concerns about the mounting costs of a Defined Benefit (DB) Scheme in the oil and gas sector came to a head when a valuation revealed the need for 50% employer contributions. After presenting all the options, First Actuarial supported the...

The costs of running a DB Scheme were continually increasing for a company in the oil and gas industry.


Diabetes UK

With First Actuarial’s governance and scheme secretarial service, Diabetes UK benefits from proactive and efficient support that covers every risk and eventuality.

"I’ve never regretted appointing First Actuarial to carry out governance and scheme secretarial services. They pass every test with flying colours and we feel very lucky. Running a pension scheme involves managing significant risks that can put organisations under acute financial pressure. So it’s worth getting the right tailored service to manage that risk."



Trustee Directors of the PremierFirst Vehicle Rental Pension Scheme struggled to find documents, and needed staff support and storage space for the archive held by the employer, Europcar, until they moved to the Client Hub.

“First Actuarial offered us a sensible and well-priced proposition. They supported us very well in uploading all our information in a structured way.
We’re not aware of any document going missing in the process. And it’s maintained very well.”

See all our case studies
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