What are commercial consolidators?
A relatively recent development in the pensions market this solution provides an alternative to securing your scheme with an insurance company at potentially lower costs. For some schemes this solution will provide a good outcome for all Stakeholders.
Employer:
Opportunity to transfer pension liabilities at a lower cost than bulk annuities
Trustee:
An immediate improvement in funding and capital set aside as a buffer which in many cases may be desirable compared to the current employer covenant
Member:
A professionally run operation focussed on delivering good member outcomes
How does this compare to a buy-out?
| Buy-out | Commercial Consolidator | |
| Entity | Insurance Company | Commercial Consolidator |
| Regulatory Environment | PRA / FCA | Pensions Regulator |
| Backstop | FSCS | PPF |
| Risk | Lowest risk | Should be low risk |
| Cost | Higher cost | Expected lower cost |
| Members | Individual Insurance Contract | Pension scheme |
| Current trustees | No Trustees | New Trustees |
| Current Sponsoring Employer | Removed | Removed |