It saddens me that so much brain power has been allocated to DB with DC almost standing


for ‘Don’t Care’. Alan Pickering, BESTrustees


we engaged with the sponsor but they did not want to get it off the books for a number of reasons. So we took steps to de-risk and match buyout pricing. A lot happened in the two years that followed so we were able to buy the scheme out in February, returning a healthy surplus to the sponsor.


The early engagement helped us to manage the uncertainty. We found out how it met their corporate objectives and aligned the trustees with their investment strategy and planning, giv- ing us time to get out of hedge funds, for instance. It took us three years to buyout, but it met everyone’s objectives and was driven by the early engagement. Cusack: A three-year period also gives you an opportunity to deal with the data. Doing benefit specification today lets you know if there are any pieces of paper you need to find so you can take it forward at a pace that suits.


There is a misunderstanding that if your funding position is good you can buyout. You can’t if you do not have the right data. The project plan is a way of teasing out the issues, although you may not go with that plan. Hartree: Sometimes there is an element of an ‘essay crisis’ and people need an impetus to get their ducks in a row. Jo Myerson: I am a fan of an essay crisis because it is quite effec- tive, it is cost effective – the advisers look at something once and focus on it properly because of the tight timeframe rather than picking it up and putting it down again over a longer period.


10 July–August 2022 portfolio institutional roundtable: Endgame investing


Cusack: I agree that it is inefficient if there isn’t some form of pressure. I have a scheme where the benefit spec revealed a lot of errors and we are trying to make sure members are getting the right benefits. Going to buyout within 12 months would be impossible because no insurer would back it. Pickering: An American company I have been working with wants to transact in December 2022, which is the most benign check date for their profit and loss. I do not mind the sponsor having a deadline of December, but I am not going to allow the administrator to have a deadline in December because they want to go on holiday in the summer. It is no excuse. They have to have their feet held to the fire. Cusack: The dashboard will help with that. You have to get your data right for the dashboard, so in theory there will be more work on the data.


How are raging inflation and rising interest rates affecting endgames? Cartwright: Perversely, the market turmoil has been beneficial for some funding levels. Whether that is because schemes hedged the retail price index or that insurer pricing has become more competitive with spreads widening.


If you had a proper plan coming into this with an eye on dealing with legacy issues such as liquidity, you have been able to make transactions from the funding gains we have seen this year.


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