MBW International, a United Kingdom (UK) based joint venture between Milliman and Barnett Waddingham, has organized a roundtable discussion entitled “UK defined benefit pensions, a current overview: What can we learn in the Netherlands?” on Tuesday, 3 October 2017.
The roundtable is aimed at Dutch companies with a deficit in their UK defined benefit (DB) pension scheme as well as companies interested to learn more about the latest UK pension developments.
The roundtable will focus on the following topics:
- An update on the UK pensions market and the impact it is having on Dutch companies – this will include recent analysis by the leading UK actuarial firm Barnett Waddingham LLP (the analysis will be distributed at the event).
- Current market opportunities which could help companies tackle their UK pension problems, including:
- Changes to the way UK employees can access their pension savings that make it more attractive for them to transfer DB benefits into a defined contribution arrangement. This helps reduce the scale of the historic DB obligations.
- Continuing developments in the UK bulk annuity market.
- What can we learn in the Netherlands from our UK counterparts?
- Management of international pension plans – how can this be done in a more harmonized manner to increase efficiency, reduce risk, and achieve greater consistency across a business.
MBW International Directors Nick Griggs and Andrew Vaughan are guest speakers. Both Nick and Andrew have considerable experience dealing with these UK pension issues.
Seats are limited. If you would like to attend, email us here for more information.
Milliman and Barnett Waddingham, UK’s largest independent provider of actuarial, administration and consultancy services, today announced a joint venture.
Operating under the name of MBW International, the joint venture brings together the significant expertise of the two independent firms to deliver superior global retirement benefits advice to companies with headquarters in the UK and global companies with UK operations. The new organisation will offer truly independent global pensions advice from a single source, with full access to the experience and resources that live within the Barnett Waddingham and Milliman businesses. It will follow their shared values of providing quality, independent advice to their clients.
Nick Salter, Senior Partner at Barnett Waddingham, said: “MBW International will allow us to extend our global pensions expertise to support the full needs of multinational organisations with their overseas pension arrangements, whilst retaining the independent ownership structure of Barnett Waddingham. Clients of MBW International can expect to receive the same high quality, independent advice that Barnett Waddingham and Milliman are already known for.”
Steve White, Milliman CEO, said: “The establishment of MBW International enhances the range of retirement consulting services Milliman can offer its multinational and UK-headquartered clients. The obvious synergies between Milliman and Barnett Waddingham are built on our shared values: Independence, quality, and dedication to superior client service.”
Pension reform in the United Kingdom has given individuals more access to their retirement money. As a result, post-retirement risk has also been shifted to the individual. This development is providing financial service professionals the opportunity to create new retirement planning models.
In this FT Adviser article, co-authors Colette Dunn and Chris Lewis offer perspective on a retirement framework that matches a retiree’s income needs to specific levels of risk. Here is an excerpt:
Using a bucket approach to discuss expected spending requirements throughout retirement can make it easier for individuals to understand their needs, their varying attitudes toward risk, and the necessary trade-offs. This approach can also be used by advisers to build a bespoke portfolio solution for a client…
The bucketing approach can be thought of as a ‘bottom up’ approach to determining the retirement solution, which is intuitive and easy to explain to clients. In addition, sophisticated modelling tools are available which an adviser can use to validate and/or fine-tune the overall asset allocation within and between buckets – that is, taking a ‘top down’ or diversified portfolio level approach.
Benefits of the framework
The framework can be used by advisers as part of the retirement planning process, and can be tailored to individual circumstances, taking into account both financial and emotional needs. It meets the three previously identified benefits, namely:
• Simplifying a complex retirement into a structured approach,
• Ensuring that an appropriate level of risk is taken for each prioritised retirement need, and that the overall level of risk for the portfolio is appropriate for the individual, and
• By segmenting into buckets, and thereby providing a higher level of certainty in the short to medium term, it provides individuals with peace of mind and helps to avoid the potential for overreaction to market shocks.
People retiring after April 1 in the UK will have the freedom to do whatever they like with the money from their various pension plans. This FT Adviser article by Milliman’s Colette Dunn and Russell Ward offers perspective on the effect reform will have on an individual’s risk and also on the impact on defined contribution pension schemes.
Here is an excerpt:
To reflect changing retirement patterns and provision, DC schemes need to offer flexibility. Individuals want the flexibility to postpone retirement and/or phase pension income, to align with continued participation in work. These are two fundamental ways for individuals to manage the risk that pension income will be less than they require. Flexibility to integrate the Nest pension with other pensions so that the total pension income is level could also be beneficial. Individuals also want to have their money when they need it. In other words, they require flexibility in terms of sequencing. For example, individuals may want a lump sum when they retire to update their house, buy a new car or go on holiday. They may also need an increased income towards the end of their retirement if they need to fund care costs.
It is clear that the next generation of products need to enable ongoing advice. As the circumstances of the retiring individual evolve, their retirement solution must have the ability to adapt, so that they can respond dynamically to changing needs.
Given an individual’s need for certainty in retirement, we expect guarantees to remain in demand for at least part of their solution.
…The new environment provides an opportunity for advisers to help individuals throughout their retirement, and for providers to offer solutions which recognise the changing needs and regulatory environment. This will enable individuals to make better choices which provide improved risk-adjusted returns on their retirement savings and deliver a better overall chance of meeting their goals. The tools and techniques required to deliver these solutions are available now.
In this Raconteur article, Colette Dunn, a consultant in Milliman’s London office, summarizes key conversations retirement advisers need to have with individuals during preretirement and at-retirement stages. Here is an excerpt:
Retirement has also become less of a definite line in the sand and has evolved into a journey where people gradually work less. A total of 76 per cent of those polled for the 2012 Attitudes to Pensions survey said that they would do some paid work beyond the SPA.
Many people have existing pension provision and the number of people with some form of pension will increase as a result of auto-enrolment. However, people are often disengaged with the process of saving for their retirement. Of those questioned in the survey, 62 per cent with a private pension still had no idea or only a vague idea of what their retirement income would be.
There is a need to engage with people about their retirement savings. Once people get into their 50s, retirement seems much more real and within reach. This is a key time to start a conversation with people about getting a better understanding of what income they will receive in retirement and, if necessary, how they can improve it.
Starting a conversation with people in their 50s or late-40s is key as they can be brought on board to go through the life stages; taking them from pre-retirement to the eventual point of retirement and onwards through retirement where their needs will continue to evolve.
In many cases there is currently a disjoint with the “conversation” that the financial services industry has with individuals and this needs to be resolved. There are signs that some in the industry are starting to acknowledge the need to get closer to customers as they approach retirement and this trend needs to grow.