Actuarial Consultancy
Given the increased regulatory focus placed upon scheme
funding by the Pensions Regulator, the provision of high quality, yet pragmatic
actuarial consultancy advice, has never been more important.
Our actuaries and consultancy teams are experienced in the complexities of scheme funding negotiations involving trustees, employers and when required, the Pensions Regulator. We place an emphasis upon a collaborative approach to funding negotiations, taking time to understand the objectives and constraints of all parties. In this way we are able to deliver our advice in an efficient and cost-effective manner.
Our approach
Our overall philosophy and approach to providing advice is to combine our depth of consultancy experience with exceptional modelling and technical skills, thereby seeking to find the right balance between robust and comprehensible advice.
Our emphasis is on:
- distilling the key issues which need to be addressed with clients
- communicating these in a straightforward and interactive way
- involving various members of the team, both behind the scenes and client facing
We provide a full range of actuarial consultancy services which includes:
- Advice in respect of changes in legislation and market development;
- Valuations and funding updates using our internally developed funding and investment tool QuantiFI
- Annual funding updates;
- Actuarial factor reviews;
- Transfer insufficiency reports;
- Benefit design and augmentation.
We have developed our own internal system, QVal, that we use exclusively to produce our actuarial valuations and calculations. QVal was designed as an open transparent modelling system, rather than a black box, that enables the user, reviewer and Scheme Actuary to see the development of the calculation process.
There are risks for every assumption used in the funding valuation because in reality assumed value is an estimate only. There may be a need for higher-than-anticipated contributions if:
- Members live longer than expected;
- Inflation is above the assumed rate and not offset by higher investment return;
- Pension increases in payment and/or deferred pensioner revaluation is at a higher rate than assume;
- Members exercise benefit options – for example on cash commutation or early/late retirement – in a way that leads to benefits higher than those assumed in the valuation.
There are other associated risks, including:
- Sponsor risk – that the employer will be willing and able to continue sponsoring the scheme and meet any deficits;
- Data risk – a cornerstone of any actuarial valuation is the data on which it is based. If this is wrong or incomplete then the valuation may be compromised;
- Legislative risk – that new legislation could change benefits that paid to members or the way benefits are funded;
- Investment-related risks – for example, assets under-performing the investment return objective.
Our trustee de-risking consultancy service sets out a standard range of standard risk mitigation options as well as more challenging ideas, based on current themes and availability in the marketplace. We have helped many clients to de-risk over the years, by providing such services as:
- Data cleansing exercises
- Buy-Ins and Buy-Outs
- Formulation of investment strategy
- Insuring pensioner liabilities
- Insuring deferred pensioner liabilities
- Enhanced transfer value exercises
- Pension increase exercises
- Promoting early retirement options
- Alternative financing
- Longevity Swaps
Testimonials
“The Quantum team have taken the time to get to know our business and understand our aims. From actuarial advice to investment advice right through to administration we have been extremely impressed with the professionalism, efficiency and thoroughness of all the teams involved. We would have no hesitation in recommending them to future clients.”
“We've been working with Quantum since 2006; they are professional, knowledgeable and provide a great service. The team are fantastic, very friendly and approachable, you get a quick response to queries, they explain things simply, so you understand things, avoiding too much actuarial and pension jargon.”
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Case Study
Helping a not-for-profit organisation with its ABCs
(Asset-Backed Contributions)
Ensuring a pension scheme is well funded with parental guarantee after company re-structure
Quantum Advisory provides alternative support via sponsor with weak covenant
Triennial valuation
Benefit options flyer
