Amalgamation of Legacy Pension Plans

Our client is a UK packaging group, who had acquired several businesses in Ireland over a number of years. Various defined contribution plans were in place in each business, offering different benefit and charging structures, handled by a variety of insurance companies and consultant providers.

The Issues

The client faced a number of issues;-

  • Different contribution rates applied within the plans.

  • For some plans, the employer met the management costs, in others, the members met the costs.

  • In some instances PRSA’s were used instead of DC plans.

  • Death in service benefits were provided for some plans and not for others.

  • Non-pension members were not covered for death in service benefits.

The Goal

The client wished to establish a single new defined contribution pension plan, which would be offered to all existing employees and new hires, with a benefit structure, which was consistent across all their businesses.   In addition, the client wanted to wind up the various legacy plans and encourage members with PRSA’s to transfer to the new plan. Finally, the client wanted all employees to be covered for death in service benefits.

Our Approach

  • Firstly, we took control of the various legacy plans so that we would be in a position to ensure that the governance and compliance issues were all in order.

  • Working with the clients finance team, we ran various scenarios in relation to the cost of harmonising the benefits. This enabled the client to decide on the appropriate benefit basis for the new plan.

  • We provided the client with a detailed project plan, outlining the deliverables at key milestone date.

  • We sought and obtained Revenue approval for the new plan.

  • We drafted the communications material for the new plan to include member booklets, investment guides and presentation material.

  • We engaged in a consultation process with the members of the various legacy plans.

  • We arranged a series of information briefings at the various business locations to present the new plan and invite employees to join.

The Goal

The client wished to establish a single new defined contribution pension plan, which would be offered to all existing employees and new hires, with a benefit structure, which was consistent across all their businesses.   In addition, the client wanted to wind up the various legacy plans and encourage members with PRSA’s to transfer to the new plan. Finally, the client wanted all employees to be covered for death in service benefits.

The Outcome

Virtually all of the members in legacy plans, whether dc or PRSA, opted to join the new plan. Client feedback to us revealed that;

  • Employees were appreciative of the employer’s decision to treat all employees equally in the matter of benefit provision.

  • Those who had borne the management charges under some of the legacy plans were delighted that the employer was now meeting that cost.

  • Those for whom the employer had already met the management costs were more appreciative of the fact, which they had not previously considered.

  • The communications material and the language used in the information sessions was simple and easy to understand.

  • The APT staff were professional and courteous.

  • The APT web portal was instrumental in bringing the whole project together.  Members appreciated the fact that they have a private web account where they could follow the progress of their pensions.

  • Members have transferred some €7m of assets to the plan from previous employers pension plans, since the web portals were opened.

2018-09-13T12:09:13+00:00