Retirement
Defined Benefit Pensions
Ongoing administration and payroll for defined benefit schemes that remain with their trustees, including pensioner payroll, increases and member queries.
Ladies View, Co. Kerry · Marco Ober, CC BY-SA 4.0
Who it is for
Trustees of ongoing defined benefit schemes
What it does
- Pensioner payroll and annual increase runs
- Member helpline staffed in Ireland
- Statutory disclosure and benefit statement production
- Actuarial liaison for triennial valuations
The product in full
Not every defined benefit scheme is heading for a buy-out. Many will run for decades, and while they do somebody has to pay the pensioners on the right day, apply the right increase each April, produce the statutory disclosures, and answer the member who telephones to ask what happens to their spouse.
This is that service. Pensioner payroll runs monthly with an annual increase run; the increase basis is applied per benefit tranche, because a scheme that has been through several rule changes rarely increases everything the same way. Statutory disclosure and benefit statement production are handled on the scheme’s own timetable, and the actuarial liaison for triennial valuations is part of the job rather than an extra.
The member helpline is staffed in Ireland, by people who can see the scheme’s own rules. That is the part trustees notice: a member query answered correctly first time does not become a complaint, and a complaint is far more expensive than the call.
Literature
Product literature is issued to appointed intermediaries. Ask your underwriter, or request it through the enquiry form.
- Service descriptionOn request
- Transition checklistOn request
How it works
What happens, in order
From the first enquiry to the point the cover, the contract or the facility is in place.
Transition from the incumbent administrator
Data, rules, benefit specifications, payroll history and open cases, against a checklist agreed with the trustees.
Monthly pensioner payroll
Payments, deductions and reconciliation, with the bank file and the control totals reported each month.
The annual increase run
Applied per benefit tranche under the scheme’s own rules, with the calculation evidenced for the trustees before it is paid.
Disclosure, statements and member queries
Statutory disclosure on the scheme timetable, benefit statements, and a Dublin-based helpline that can see the rules.
Quarterly trustee pack, and valuation support
Membership movements, payroll totals, case turnaround and open items — plus the data extracts the scheme actuary needs at each triennial valuation.
The numbers
A worked example
Illustrative arithmetic, so the shape of the product is visible rather than described. Nothing here is a quotation or a projection.
An annual increase run on a 900-member scheme
Why the increase run is a per-tranche calculation rather than one percentage. Illustrative figures.
- Pensioners in payment
- 900
- Annual pensioner payroll
- £8,100,000
- Tranche A — pre-1997, discretionaryNo guaranteed increase under the rules
- 0.0%
- Tranche B — 1997 to 2005, capped at 5%
- 3.1%
- Tranche C — post-2005, capped at 2.5%
- 2.5%
- Weighted increase across the payroll
- 2.2%
- Additional annual payroll cost
- £178,200
Illustrative. A scheme that has been through several rule changes increases each tranche on its own basis, which is why a single headline percentage is almost always wrong and why the calculation is evidenced to the trustees before it is paid.
The payroll, split by increase basis
The illustrative £8.1m payroll above, divided into the tranches the increase run has to treat separately.
Annual pensioner payroll
£8,100,000
- Post-2005, capped at 2.5%£2,835,000 · 35%Increased at 2.5% in this run
- 1997 to 2005, capped at 5%£3,240,000 · 40%Increased at 3.1%
- Pre-1997, discretionary£2,025,000 · 25%No guaranteed increase
View these figures as a table
| Amount | Share | |
|---|---|---|
| Post-2005, capped at 2.5% — Increased at 2.5% in this run | £2,835,000 | 35.0% |
| 1997 to 2005, capped at 5% — Increased at 3.1% | £3,240,000 | 40.0% |
| Pre-1997, discretionary — No guaranteed increase | £2,025,000 | 25.0% |
| Annual pensioner payroll | £8,100,000 | 100% |
Suitability
Where the Defined Benefit Pensions fits
The cases it answers, the cases it does not, and what an underwriter needs before quoting.
It is the right answer when
- Ongoing defined benefit schemes with 150 members or more.
- Trustees who want the helpline answered by people who can see the rules.
- Schemes whose increase bases differ by tranche and need the calculation evidenced.
Look at something else when
- Schemes about to buy out — Bulk Annuities is the route for those.
- Schemes below 150 members, where the fixed cost of the service is hard to justify.
What we need to quote
- 1.Trust deed and rules, with all amending deeds.
- 2.Member and pensioner data, and the payroll history.
- 3.The benefit specification, the increase bases per tranche, and the disclosure timetable.
Questions
What brokers ask us about this product
Who answers member calls?
A Dublin-based team with access to the scheme’s own rules and records, not a general contact centre reading a script.
How long does a transition take?
It depends on the state of the incumbent’s data. The transition checklist sets out what we need, and the honest answer is that data quality decides the timetable.
Does the service include the actuarial valuation?
The liaison and the data extracts, yes. The valuation itself is the scheme actuary’s work.
Request information
Ask us about the Defined Benefit Pensions
The form reaches an underwriter in Dublin. If you are an intermediary, say so and we will route it to the broker desk.