DB pension planning: begin with the end in mind

Read Barnett Waddingham’s latest thoughts on importance of long-term strategic planning.

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I’ve been talking for a while about the importance of long-term strategic planning: thinking about where your defined benefit pension scheme is heading and working backwards from there.

“Begin with the end in mind” you may have heard me say at some point. The Pensions Regulator is now encouraging exactly the same kind of thinking – a move away from seeing the triennial actuarial valuation as a snapshot funding review and moving towards schemes having a genuine long-term plan that endures from valuation to valuation. In other words, long-term solutions for long-term problems. Sounds simple like that doesn’t it?

But what does it mean in practice? What’s the best way to develop and manage your own long-term DB pension strategy?

Well at the heart of every strategy is a long-term goal. I play chess and the long-term goal in chess is clear – capture the opponent’s king before yours is captured. Every element of a chess player’s strategy can then be tested against this goal – does this move make it more likely that I’ll win? If the answer’s yes then it’s a good move. If the answer’s no then you should look for a better move. But how many pension schemes have even articulated what their long-term goal is, let alone test their decisions against it?

Continue reading at https://www.barnett-waddingham.co.uk/comment-insight/blog/db-pension-planning-begin-with-the-end-in-mind/

Barnett Waddingham

Barnett Waddingham is proud to be a leading independent UK professional services consultancy at the forefront of risk, pensions, investment and insurance. From small beginnings with just 20 people, we’re now a team of over 1,370 people in nine offices. 88 are partners, each delivering on our values and our promise, ensuring the highest levels of trust, integrity and quality. Everything we stand for at Barnett Waddingham is embedded in our promise – to do the right thing. We’ve applied this meaningful principle across all aspects of our business with continued success. Our continued and long-term commitment to delivering value is our promise to all our people and clients.

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