Deloitte launches a pensions advisory practice

Deloitte is expanding its pensions advisory capability with a multi-disciplinary pensions practice that will draw on expertise from across the firm, including corporate finance, actuarial, tax, treasury and assurance.

The move will provide clients with services across three broad areas: the funding of pension schemes, benefits strategy for employees, and day-to-day pensions operations. 

The business advisory firm has an aggressive growth plan to treble the size of its pensions advisory services practice within four years. The move is in response to pension challenges becoming increasingly complex and pervasive for many of Deloitte’s public and private sector clients.

Tony Clare, head of the pensions advisory services practice at Deloitte, said: “The challenges our clients face are diverse and range from dynamically reducing pension scheme deficits to ensuring companies’ pensions systems are capable of dealing with legislative changes announced as part of the government’s reform of UK taxation.

“We have created a cross-firm team with the knowledge and experience to work with companies on solving every aspect of these challenges. Deloitte aims to triple the size of our pensions business over the next three to four years. We are attracting direct approaches from the highest quality people in our competition.”

In 2010 Deloitte launches its Pension Funding Partnership (PFP), which uses an organisation’s asset base to finance pension deficit obligations. To date, it has been used to fund over £2 billion of pensions deficit obligations representing more than 75% of the market activity in asset-backed partnership structures.

High profile transactions using Deloitte’s PFP in 2010 include the John Lewis Partnership, ITV, Whitbread, Sainsbury’s, and Marks and Spencer.

Deloitte expects to announce a further £2 billion of PFP transactions over the coming months that will involve new ways of unlocking the value of corporate assets to help finance pension commitments.

The firm is also in discussion with a number of public sector organisations on the use of PFPs.
Clare said: “Deloitte PFP transactions have established a new approach to deficit management – one that balances the needs of business to find an affordable and cashflow-efficient way of meeting its pension obligations, with the needs of the pension scheme to improve the security of benefits for its members. 

“We welcome The Pensions Regulator’s recent guidance that alternative funding arrangements can improve the support provided to a pension scheme, reduce risk to members and, at the same time, strengthen the covenant of the sponsoring employer. In appropriate circumstances, alternative funding mechanisms can be an effective and more affordable way of funding schemes for an employer.”

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