Partners in Confidence: Tender exercise for a Scheme considering endgame options
Sponsoring Employer: Manufacturer of packing solutions
Quantum Advisory’s independent tender process gave trustees confidence they had the right partner for the journey to buy-in. The outcome was fiduciary mandate that supported the scheme’s end game objective with a clear path towards securing members' benefits with an insurer.
Understanding the challenge
The trustee board of a £20m defined benefit pension scheme was preparing for the next stage of its endgame journey, with the aim of completing an insurance buy-in transaction in the short to medium term. While trustees had a positive relationship with their incumbent fiduciary manager, they wanted independent assurance that their fiduciary management arrangements remained fit for purpose as the Scheme approached buy-in.
Quantum was appointed to design and manage a competitive tender exercise, assessing both long- and short-listed fiduciary managers against the Scheme's specific objectives. The goal was to identify the provider best placed to support the Scheme through its final phase, balancing investment expertise, buy-in readiness, risk management and value for money.
Providing a big name service on a first name basis
Our approach
Quantum Advisory designed and managed a competitive tender exercise tailored to the Scheme's circumstances, objectives and expected buy-in timeframe. Each FM proposals was evaluated against the Scheme’s requirements. During discussions between the Trustee and Quantum, we focused on the following key areas:
- Buy-in expertise – evaluating the number of successful buy-ins the FM’s had completed and strength of insurer market relationships.
- Effective Liability Management – reviewing how they tracked and hedged insurer buy-in pricing, and how they monitor and rebalance interest rate and inflation hedges.w
- Transition and buy-in costs – we compared the all in costs of the buy-in project including management fees, project fees (where appropriate), and transition costs.
- Investment strategy proposal – using our investment and risk transfer expertise, we assessed the appropriateness of each of the proposed investment strategies. This included a particular focus on risk management within the context of the Scheme’s objective and timeline.
- Performance – we analysed historic performance track records of similar investment mandates against the relevant composite. This was done by assessing performance of mandates at the same FM and across different FMs.
The impact – Outcome and results
- Independent market testing supporting effective decision-making.
- Confidence in choice of fiduciary manager.
- Endgame-aligned fiduciary mandate.
- Greater buy-in readiness.
- Balance of cost and services provided.
By combining technical investment expertise with clear communication and practical endgame experience, Quantum helped the trustees navigate a critical decision and position the Scheme for the next stage of its journey.
Talk to our team
Get in touch with our friendly team today to talk about how we can help your business.