Liability management

Pension scheme liabilities can be worrying for today's employers

Uncertainties around DB 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 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

The Kennel Club

Concerned about the risk of an Employer contribution increase as a result of high liabilities, Trustees of the Kennel Club Pension Fund turned to First Actuarial.

“They’re extremely professional and helpful. Their input always seems sound, logical and well presented. First Actuarial handled the transition well, they provide us with helpful guidance, and have delivered what they promised when they pitched for the work.”


Royal Mail

The Communication Workers Union (CWU) enlisted the help of First Actuarial when Royal Mail proposed replacing its Defined Benefit pension fund with individual Defined Contribution arrangements.

“I can’t speak highly enough about First Actuarial – their people have been brilliant. The journey has been inspirational, nothing but a positive experience.”



As a result of an unusual clause in their trust deeds, Trustees of the pension scheme sponsored by the Society of British Aerospace Companies (SBAC) funded their liabilities on a buy-out basis.

“First Actuarial are very proactive. They respond quickly and get things done. They have proved to be competent and conscientious, and have a very professional and personable approach to business relations.”

See all our case studies
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