Hymans Robertson launches new strategic buy-out framework: PACE

28 February 2024

Hymans Robertson publishes on its website:

A new consulting approach and digital app which empowers defined benefit (DB) schemes to build and implement a cohesive buy-out strategy and plan has been launched by Hymans Robertson today. Backed by innovative digital tools, the PACE (Plan, Aim, Check, Execute) framework helps schemes to aim squarely at buy-out, using dynamic annuity pricing to benefit from the best insights on insurer pricing. It integrates affordability, investment and due diligence considerations to build a robust plan, making the best use of time leading-up to the transaction to get schemes ready for buy-out. The PACE app also uses dynamic annuity pricing to let schemes see how close they are to buy-out and what happens if things change. This new approach from the leading pensions and financial services consultancy supports robust decision making, with dynamic progress checks and Hymans Robertsons’ risk transfer team ready to execute a transaction when the time comes.

Commenting on the new PACE approach and app, Laura McLaren, Head of Scheme Actuary Services, Hyman Robertson, said:

“DB schemes targeting buy-out need a cohesive strategy and plan to get there, and sooner rather than later. Our PACE framework helps schemes use the time they have in the most efficient way.

“To plan effectively, schemes need a clear idea of the time that they expect buy-out to be affordable. Insurer pricing isn’t ‘gilts plus’, so our PACE app uses dynamic annuity pricing to let schemes see how close they are to buy-out and what happens if things change. They can test how various funding and investment decisions would affect their journey to buy-out, both in time and risk. For example, how many years plans might accelerate by or how many more years they’d need to wait, and how large the average deficit could be in different scenarios.

“Schemes need to know what to prioritise at each stage of their buy-out journey, when to take action to control costs, and how to be ready to capture opportunities when they arise. There are a number of aspects that will impact on overall readiness. For example, timescales for transitioning to a liquid buyout-ready portfolio and having signed off data and benefits. Schemes don’t want to put in place unintended blockers. Managed effectively with a clear timeframe in mind, these activities can support rather than dictate your journey plan. Our approach is designed to bring all of that together, with innovative digital tools robustly monitoring progress to check that plans are on track.

“Using PACE, schemes will reach their buy-out destination confidently and efficiently, achieving a good outcome for members.”

Hymans Robertson has been working with trustees and sponsors on strategy for decades. It has led risk transfer transactions totalling more than £30 billion.

Source: Hymans Robertson