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Helping trustees to transfer members to another DC plan in a large organisation | Case studies | Quantum Advisory

Helping trustees to transfer members to another DC plan in a large organisation

Introduction

In 2005, Quantum was appointed as Scheme secretary, administrator, consultant and investment adviser to the Cassidian UK Pension Plan (then known as the Cogent Pension Plan), a trust-based defined contribution pension scheme established in 2002. Cassidian is part of the Airbus Group.

As part of a restructuring exercise, Airbus decided to close the Cassidian UK Pension Plan with effect from April 2018 and to transfer all active and deferred members to another defined contribution trust-based scheme in the Airbus Group. Quantum managed the project as Scheme secretary, and called upon the Plan’s legal advisers, Eversheds Sutherland and the Head of Airbus Pensions UK for assistance as and when needed. 


The Project

To facilitate a smooth transition, a pension scheme wind-up involves a number of stages. A project plan for the closure and eventual wind-up of the Cassidian Plan was drawn up by Quantum for the Trustees. In view of the wide dispersion of members and former members across the UK, some of whom had left the Plan many years ago, a comprehensive address checking exercise was performed using LexisNexis. As a relatively young pension scheme and because Quantum had been involved with the Plan for many years, other member data was already clean. One important aspect of the member address checks was that it allowed a map to be drawn up showing the membership distribution in the UK and overseas. This helped the Trustees to decide in which publications the statutory legal notice could be placed, in addition to the London Gazette.

Whilst the Plan closure was getting underway, the GDPR requirements came into force; this had been considered in the project plan with Quantum issuing privacy notices to members.

In order to make the two transfers from the Cassidian Plan, Quantum (as the appointed Actuary) compared the two schemes and ensured that the receiving Airbus Scheme was broadly no less favourable than the Cassidian Plan. .After checks were made, the actuary’s certificate, along with the legal documents needed to progress the bulk transfer were given to the the Cassidian Plan Trustees for their approval and signature. Quantum's role also included organising and producing comprehensive minutes from meetings held with the Trustees.

Active and deferred members of the Cassidian Plan were transferred to the Airbus Scheme separately. In order to effect the transfer, Quantum liaised directly with the investment manager for the receiving scheme. Conference calls were held regularly between the investment manager, the Cassidian Plan Trustees and the Head of Airbus Pensions UK. Quantum also attended calls with the Airbus Scheme Trustees.

To keep the Trustees updated during the closure and wind-up, Quantum continued to hold Trustees’ meetings. As the Plan allowed income drawdown, there were a small group of pensioners in the Plan. The Airbus Scheme was unable to accept these members, as they had crystallised funds. Airbus UK agreed to pay for financial advice from an IFA for these members. Quantum introduced the IFA to the Trustees at one of their meetings. 

Later stages of the project involved paying winding-up lump sums to members who had chosen this option, producing pension savings statements for members who exceeded the Annual Allowance, monitoring the value of the Trustees’ Reserve and Trustees’ bank account and providing information to the IFA to allow advice to be given to the pensioners.

Throughout the project, member data was kept current, with a view to providing the data to Airbus, so that any future member queries about their Cassidian Plan membership can be fully answered.


Conclusion

A realistic timescale for the project, dictated by Quantum, together with payment of assets to the new scheme in two stages, ensured that all parties were given sufficient time to complete their actions. Quantum continued to act as Scheme secretary throughout the project and ensured that no stages in the Plan closure and wind-up were overlooked. Quantum remains on very good terms with the client and was well-respected throughout. The reference to be obtained will underline the value that we added to the process.