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© 2017 Willis Towers Watson. All rights reserved.

Easy win-win-win?Liability management and member choice

Pensions & savings annual conference

13 June 2017

Stewart Patterson, Willis Towers WatsonRob Hamer, AstraZeneca


© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.

Member choice exercises – what the member sees

2

PIE £10,000 pa £14,000 pa

Linked to inflation Fixed amount for life

or

RTO

£45,000 £65,000

£7,000 pa £10,000 pa

£195,000

Linked to inflationPension for spouse

Fixed amount for lifeNo spouse’s pension

Fixed amount for lifeInheritable

or

or

or

and

Cash

More income

in the early

years

More cash

now plus

more

flexibility

overall

#WTWpensionsevent



What the member thinks

3

I’ll stick with

what I know

What are

others doing?

What feels

“easiest”?

Do I want flexible

income?

Is my income secure in

DB?

What other income do I

have?

Do I want more now or

later?

#WTWpensionsevent

Pension Increase Exchange

Case study and reflections

AstraZeneca Pension Fund



Phase 2

Phase 1 1 March 2016

Offer letters posted

30 June 2016

2 December 2016 31 March 2017

Offer period closed

Overview of PIE offers

5

Tim

elin

e

59% of members spoke

with IFA (2,149)

Offers sent to 3,672

pensioners

Phase 1

37% took the PIE (ie 64% of those who

engaged)

63% of members spoke

with IFA (2,680)

Offers sent to 4,243

pensioners

Phase 2

41% took the PIE (ie 65% of those who

engaged)

Offer structure: Swap inflation-linked Pre97 pension for flat income (80% Balanced Deal)

Combined impact: Reduction in deficit of £40m-£60m on accounting and funding

#WTWpensionsevent



Key reflections

6

Upfront and regular engagement of all involved in

project

High quality, simple and plain English

communications

Small Working Group of Company and Trustee

representatives to meet regularly and take

decisions and sign off communications

Using one organisation for all services (project

management, communications, actuarial etc…) –

saved a lot of time and management

WHAT WENT WELL – CONTINUE TO DO THINGS TO CONSIDER DOING DIFFERENTLY

Members with two periods of service (received

two letters) not always clear which period of

service they were discussing

Design – project team to give working group

clearer steer on preferred course of action

Communications – management of version

control and conflicting changes from multiple

people

Agree upfront with IFA process principles for

dealing with exceptional cases eg F2F meetings

#WTWpensionsevent

7

Q&A

?

8

Increasing member demand and use of technology

Developing trends



Member awareness

and access

Trustee or sponsor

role?

Is this a peak or a

trend?

Transfer activity in the market

9

Pressure on

administrators

#WTWpensionsevent



The increasing trend for flexibility

10

… member

engagement in

exercises where

the member pays

for the advice

themselves is ten

times less than

those where the

cost is met for

them

Paul Chafer, Wren Sterling

#WTWpensionsevent



Grabbing members’ attention

11

Transactional administration

communications

Microsite

Branded and crafted

communications

Portal

Written materials

can generate

engagement and

set out options

Online content

can enhance

engagement and

support member

education

#WTWpensionsevent

https://microsite.ehr.com/balfourbeatty-yourpension/

https://microsite.ehr.com/balfourbeatty-yourpension/



Speaker details

13

Stewart PattersonHead of Liability Management

Phone: +44 (0) 161 833 [email protected]

Rob HamerUK Benefits ManagerAstraZeneca

#WTWpensionsevent

mailto:[email protected]

14

…check the screen in the Great Hall for details of the

breakout sessions following lunch

Lunch

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