The Leyland Bus Pension Scheme has been both an actuarial and investment services client of Hymans Robertson for over 20 years. But with a buy-out shortfall and no sponsoring employer, it looked like wind up was an impossible outcome for the scheme.

However, a ground-breaking strategy turned the situation around which allowed the scheme to successfully wind up. 

The strategy 

Two key activities helped the Trustees turn the situation around:

1. GMP restoration: In contrast to the work many schemes are currently doing to reconcile and equalise GMPs, we worked with the Trustees and the Scheme’s legal advisor to transfer the responsibility for GMPs back to the State. This essentially removes the effect of “contracting-out,” and the transfer was achieved on attractive terms for the Scheme.
2. Re-shaping Scheme benefits and locking into insurance: we brokered a deal with MetLife (subsequently taken over by Rothesay Life). By including terms that allowed for benefits to be reshaped linked to the GMP restoration, the Trustee were able to lock into full insurance early on before the member option exercise took place to remove the risk that insurer pricing could increase.

The key takeaways

• Strong project management and expert oversight of the wind up, including robust management of expenses is crucial. 
• A deep understanding and knowledge of the insurance market is essential. 
• ‘Outside the box’ thinking can lead to successful strategies. 

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