Home Our services Trustees Risk Transfer Endgame Reviewing your endgame strategy as a Trustee

Reviewing your endgame strategy as a Trustee

What should a trustee’s endgame be?

There is no one size fits all. When considering any endgame, trustees should look at the different options available and weigh up what they consider to be the most appropriate.

The endgame strategy could be even more complex and encompass a long list of tasks and milestones that contribute to the scheme pursuing their chosen endgame pathway. This journey plan should remain open to review and realignment, responding to scheme, market and economic changes, challenges and opportunities.

Establishing a realistic starting point will help build a robust endgame strategy. Using our tool to take account of all the relevant factors, your results highlight the key considerations and rank potential options to explore and avoid.

Understand your endgame

What must trustees consider when choosing an endgame?

Scheme size and profile

Scheme size and maturity of membership profile will influence what strategies are practical and cost-effective. Larger schemes may have more options available to them, whereas smaller schemes struggle to make some endgame strategies affordable or simply accessible.

Funding and covenant

The strength of your employer covenant, current funding level and scheme investment mix will determine what’s affordable and achievable. A stronger covenant and good funding position affords more flexibility and wider range of options.

Corporate drivers and perspectives

Trustees must cultivate an effective relationship with the sponsor whilst maintaining their fiduciary duty to members. The employer’s strategic or financial goals could affect the timing and type of endgame strategy.

Data and operations

Your scheme’s ability to call upon accurate and robust data is critical for a successful endgame. The absence of these results in a level of greater uncertainty over the true level of scheme liabilities. Strong operational processes reduce transition risk and improve scheme value to insurers or consolidators.

When should I review my endgame strategy?

Not only is an endgame strategy unique to a particular scheme’s circumstance, but it is also unique to that time and place. Monitoring these variables is a good start and a formal endgame strategy review process is good practice.

Scheme changes

Changes to funding level, membership numbers or mortality could all mean your endgame strategy is no longer suitable and an alternative might serve your long term objectives better.

Employer changes

The strength of covenant or strategic activity such as mergers or acquisitions could have a fundamental impact on your ability to implement the expected endgame journey plan.

External factors

Economic, legislative or regulatory developments might create more options and opportunities for you to consider or indeed make your intended endgame journey more complex.

REVIEWING YOUR ENDGAME

Good times to initiate an endgame strategy review

Triennial Valuation

With up to date calculations you will have good information to base strategic decisions on. The annual funding update between valuations is also a useful time to review whether there have been any significant changes to the funding level. Any issues may be drawn into sharp relief as members must also be communicated with at this time.

Trustee meetings

This is a good opportunity to discuss the endgame strategy in the context of the wider issues of the scheme and get all relevant stakeholders and advisors together, including the employer. Placing the endgame strategy review at the top of the agenda allows any decisions made to feed into investment and funding discussions that might follow.

Ad-hoc

There are some schemes who have access to daily, up to date funding information and the ability to model investment and funding scenarios. These platforms create a transparent and responsive environment where any threat or opportunity can be responded to immediately.

Review your endgame strategy