Managing Your Scheme's Risks Through To Buyout

A buyout with an insurance company remains the destination of choice for many trustees and sponsors of defined benefit pension schemes, and the appetite to complete full buy-ins continues to grow due to the improved funding position many schemes find themselves in. Sadie Scaife explores how trustees and companies can manage the risks which will remain following the buyout.

If a scheme moves to wind-up, what protections can be put in place for the members, the former trustees and the sponsor?

Many trustees currently benefit from an indemnity from their sponsor under the Trust Deed and Rules, which trustees should seek to replicate in the wind-up deed, ensuring that the indemnity survives beyond the end of the pension scheme. Whether a given company is willing to offer an indemnity and the exact terms agreed can vary significantly from case to case, including any limitations on the term and amounts that can be claimed. If such an indemnity is provided it would