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Mergers and acquisition (M&A) activity can present businesses with unique challenges in the consolidation and management of pension and benefits schemes.
Wren Sterling works closely with businesses that have made acquisitions to simplify their administration and set them on the road to harmonisation and de-risking the employee benefits aspect of their business.
We typically act as a consultant to private equity houses and private equity-owned firms to help you understand the scale of your challenge and the opportunities that can be unlocked through consolidation and simplification. We've got project management resources, so we can be as hands on as you need us to be.
Typically, we will start with a pension scheme audit and present our findings and recommendations to you, which includes suggested next steps for bringing your schemes together.
We’ll support you through the project, liaising with your chosen scheme provider on your behalf and helping you to manage its implementation and communication to affected employees.
We’re also available to support you with ongoing scheme governance. This is an important regulatory duty, and we help trustees across the UK to discharge their duties.
Wren Sterling supports companies who have multiple businesses to integrate and each of those comes with a different pension scheme, which requires monthly administration and governance. What’s more, the acquirer has no control over the employer contribution levels, or the costs and charges of the scheme, which can vary considerably.
By going to market for a new scheme and merging acquired businesses into it, companies can bring pension schemes together, reduce their administration and often secure better terms than previously, as there are more employees in the scheme.
This principle also applies to the wider benefits across the acquisitions too, if required. A good example of this is private medical insurance (PMI). A small business may be disadvantaged and not able to offer as comprehensive cover as a larger business. By consolidating, you may be able to secure more favourable terms and better underwriting for members.
When the new schemes are in place, it provides a framework for future acquisitions, simplifying the onboarding of employees and their benefits and quickly embedding them into the same structure.
We have deep knowledge of UK pension legislation, and we regularly work with organisations based overseas that have a UK entity. This protects their interests and ensures the right outcomes for members of those schemes in the UK.
The UK pensions and benefits market can be complex space, which is subject to regular change, such as the planned reduction in lower earnings limit and age of automatic enrolment.
Pensions rules and regulations can be complex, so we can recommend a single workplace pension scheme for your business.
Group Risk benefits can be consolidated and preferential terms secured, providing a valuable safety net for employees.
Salary exchange in a consolidation context can unlock a lot of value for organisations and increase the range of benefits available to their employees.
Workplace healthcare can give employees and their families peace of mind that their medical needs are being supported.
If you’re creating a single strategy, you should understand what your employees need from their Employee Benefits.
Give your company’s employees the freedom to choose the benefits they will value most.
Minimise your liabilities and protect your business against uncertainty and the impact of losing key employees.
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Simplicity and value for money are two big value drivers here. From an administration perspective, it can be very challenging for HR teams to administer multiple schemes. Additionally, one of the advantages of growing through acquisition when negotiating workplace pension scheme terms is increasing headcount. This is likely to decrease management costs for your members and could result in improved terms for your business.
Firstly, auditing the different schemes you’ve inherited and mapping them so you understand who gets what and the corresponding costs and charges will give you a platform to work out how to consolidate. Each of these services can be consolidated, and Wren Sterling’s experts can help you audit, go to market, and implement any changes.
Some of this work will require consultation with the workforce, but it can be done. For private equity firms that operate outside of the UK, but where the entity is UK-based, it can help to have UK pension and benefits experts to coordinate the work, such as Wren Sterling.
