Hymans Robertson has launched a new guide designed to support defined benefit (DB) pension scheme trustees in linking all elements of their buyout journey into one centralised plan.

The guide, Planning your journey to buyout, aims to help schemes align their journey to buyout workstreams to create efficiencies and savings.

According to the consultancy, the cost for DB schemes that do not have a cohesive buyout journey plan could be as much as £20m.

It stated that this analysis highlighted the benefits for trustees of focusing their reporting on key decisions, while also planning activities in a way that would support their buyout journey.

The guide aims to support trustees in navigating this endgame path in a straightforward manner.

It provides an online framework for trustees, guiding them to maximise synergies and ensure that they have the right information from their advisers for their buyout journey.

Hymans Robertson noted that it also provides an outline of the key areas to consider while helping with trustees’ decision making, as well as guidance on a co-ordinated approach, which it said would help trustees for their individual schemes by breaking down the most important things to consider at each stage of the process.

The consultancy argued that a comprehensive plan agreed by the trustees and sponsors can lead to greater efficiencies in areas such as the approach to funding and monitoring, investment strategy, communications strategy and approach, and settling any DC and AVC benefits.

Commenting on the launch of the guide, Hymans Robertson partner, Richard Wellard, said: “With the affordability of buyout coming ever closer for so many schemes, it’s becoming even more important to have a cohesive journey plan in place.

“Our analysis shows the vast cost savings that can be made for those that do. There are many different elements for trustees and sponsors to keep under control and make sure they are progressing in the right way at the right time.

“It is imperative that trustees have a clear vision of the steps needed, are able to monitor progress, and have the information that enables them to take action and adjust plans in response to unforeseen events. Joined-up planning and oversight helps trustees avoid unnecessary costs and unnecessary risk.

“Trustees will have members’ best interests at the heart of all their decision making. There is always a balance as to what to communicate when plans remain uncertain and could be subject to change.

“However, at the right time, members will value reassurance that their pensions are protected and the income they rely on will continue in the same way through the buyout process.

“This is best achieved through a planned engagement strategy with good communication helping to avoid future issues.

“Overall, the more trustees are able to plan all aspects of their journey, the smoother the experience for all stakeholders.”

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