Interim recruitment case studies

Supporting a large BPA client with the PRA’s QIS exercise

A market leading BPA firm required support with replying to the PRA’s QIS exercise regarding Matching Adjustment (MA) reform due to resource constraints. Two of our Life Insurance actuaries worked in a hybrid team with four actuaries from one of the “Big 4”, plus internal support from the client, over a period of six weeks to produce the response.

The Barnett Waddingham actuaries took ownership of the model developments required to enable the required calculations to be performed, these developments were delivered on time and to a high standard such that no changes were required following internal checking. This was a key part of the engagement as delays in development would have held up the work which the client had engaged the “Big 4” actuaries to perform.

Following completion of the model developments, the plan was to support the “Big 4” actuaries in performing model runs and collating results. However, we adapted this to improve team efficiencies as we realised we could populate the MA side of the response much more efficiently than the “Big 4” team due to our knowledge of the MA model from the development work. We took ownership of this section of the response.

The client was extremely pleased with both the efficiency and quality of the work we delivered, this was particularly pleasing as we were being directly compared to the “Big 4” actuaries working on the same project. The client has since engaged us for further work.

Developing a business planning model for a large BPA client

A market leading BPA firm engaged Barnett Waddingham to support them with developing a new business planning model in Excel. This project was carried out on a secondment basis, with two Life Insurance actuaries supporting the client’s internal business planning and forecasting team.

The client had an existing business planning model in Excel, but it was extremely inefficient and had grown over the years to the point that it had turned into a “black box”. They were not able to interrogate the model and did not trust the calculations it was carrying out in some areas. The aim was to produce a new Excel model that was both efficient and transparent.

We built the new model over the course of six months. The first step was to understand the methodology used by the pre-existing model and discuss this with internal stakeholders to determine what methodology changes, if any, should be implemented in the new model. Once the methodology was determined we developed the new model structure, focusing on efficiency and transparency, and agreed this with the client. Following the agreement of methodology and structure, we commenced the model build.

The client was very pleased with the model we delivered as it was highly efficient (from hours per scenario to minutes), transparent, thoroughly tested and well documented. The client has since engaged us to do further model developments, such as IFRS17 implementation.

Supporting a large insurer with SCR run-off profile calibrations and year-end solvency monitoring

We supported a large insurer, with assets in excess of £200 billion, with the re-calibration of their SCR risk-module run-off profiles and year-end solvency monitoring. One Life Insurance actuary was seconded to the client for six weeks to assist with this.

The first four weeks were spent on the re-calibration of the SCR risk-module run-off profiles. This included both the long-term run-off profiles for the non-hedgeable risks, which were used in the year-end Risk Margin calculation, and one-year run-off profiles for all other risks for, which are used for solvency monitoring over the year. This involved working with both on-shore and off-shore teams to review, challenge, and ultimately sign-off, the profiles being used.

Once all risk-module calibrations were signed-off, we supported the client with their year-end solvency monitoring. The intention of this exercise was to give an early view of the year-end SCR and Own Funds to senior stakeholders, before all of the data for the full calculation was available.  This mostly involved setting up, and checking the setup of, models and reconciling the movement in results between runs to the movement in inputs. We identified several errors in both model inputs and outputs through this process.

The client was very happy with the support they received, praising both the quality and efficiency of work.

Operations and process support for in-house investment team

We supported the in-house investment team at a large UK pension scheme with the planning and organisation behind the operations and processes of their investment strategy.

At a high-level, we aided with identifying and categorising the various regular processes required for the smooth running of the investment strategy. This also included identifying the frequency in which the processes needed to be carried out, the potential risks involved with each process and steps to mitigate those risks. At a more detailed-level, we helped produce process flow charts for some of the daily operations that are essential to the running of the scheme. This included mapping out each stage of the process, the order that each stage needs to be done, as well as the risks involved at each stage and how to mitigate them.

Having us work in-house alongside the investment team allowed us to provide new insights on the operation of the scheme compared to traditional consultancy and our client was pleased by the additional impact that the secondment provided.

Multiple levels of onsite and remote support

A team of Barnett Waddingham administrators, project managers and actuaries were seconded onsite to a very large UK in house pension team in a number of roles and covering a range of levels, including interim cover of managing the client’s team. The £50 billion scheme was particularly complex as it had a number of benefit categories including a CARE structure.

We provided support over a significant period on a whole range of areas, from project support on for example, GMP rectification and project managing GDPR, to performing BAU roles within the in-house team.

One project our team played a pivotal role in, was the migration of their administration system to another system. With their technical expertise and experience of working with the scheme on secondment, the team first focused on writing the calculation routines into system specifications. A third party built the system and the Barnett Waddingham team thoroughly tested each calculation, documenting any issues to gain a full understanding of problems and using a ticket system to get them resolved.

The client was very happy with the support that was given and asked us to lead other projects post transition, such as the scheme closure administration project.

Large scale data and benefit audit support

We assisted the trustees and in-house administrators of a large scheme with more than 100,000 members in the run up to a large transaction and member option exercise. Our role included carrying out a high level data and benefit audit of the scheme to identify any material areas of risk or concern. This was carried out in short timescales to accommodate the wider project and involved a multi-disciplinary team of administrators and actuaries. A core team was based on-site with the in-house administration team, with a wider team spread across a number of our offices. The work was delivered within the tight timescales we had been set.

We further supported the in-house team by providing a number of secondees to support their ongoing administration work while the member option exercise was ongoing. This was a challenging period for the inhouse team who had a significant number of member enquiries to deal with. We received excellent feedback that our secondees were able to provide a good level of support and expertise but also developed a strong rapport with their in-house team colleagues.

Delivering complex change effectively

A company left government ownership and the change in ownership led to a wide variety of tasks with regard to the pension arrangements (hybrid 20,000 member scheme with £650m assets), each requiring careful and sensitive input from a range of stakeholders and advisors in challenging timescales.

The client asked Barnett Waddingham to project manage the entire exercise from a pensions’ perspective, a vast and complex undertaking which included ensuring the successful liaison between all of the parties involved: trustee, old company, new company, Government department, lawyers for each stakeholder and the Government Actuary Department.

We achieved this by establishing and constantly reviewing comprehensive project plans shared with all parties and holding regular conference calls. Within Barnett Waddingham, close collaboration was required across a number of different specialist areas, including administration, actuarial, investment, pension management and defined contribution (DC) to deliver the changes, highlights including:

• The hybrid pension scheme did not transfer to the new employer. We provided advice on the design of a new DC arrangement and on the selection and implementation of a suitable provider and default investment arrangement, ultimately a Master Trust scheme; all in less than five weeks.
• The decision was taken to close the DC section of the existing hybrid pension scheme and transfer DC benefits to a Master Trust. We advised on a default solution for closing the DC section, a provider for the default solution, default investment arrangement and actuarial advice in relation to the bulk transfer. Subsequently, we project managed the bulk transfer of the DC section to the Master Trust including solving member data issues.

The project was successful and the client commented Barnett Waddingham had added value by having an individual managing the project who had the expertise to work across all of the different services.

Risk manager secondment - setting risk management strategy

We were appointed as the outsourced Risk Manager for a FTSE250 global company, to help the organisation set their risk management strategy and engage with Senior Executives, Committees and Boards to embed risk management throughout the organisation.

We developed and implemented a comprehensive risk management framework, defined a clear set of Board-level risks through facilitated workshops, training and discussions at both the executive leadership and the board-level risk committees. We also undertook a data exploration and analysis project bridging two departments. The client was very pleased with the work and has subsequently engaged us to undertake further work.

Review of the actuarial team role in supporting scheme administrators

We supported the trustee of one of the largest DB schemes in the UK with assets around £30 billion regarding the role of the actuarial team in its support of the scheme administrators. This involved a detailed review of the processes in place for undertaking individual calculations – an area where the trustee had been experiencing a number of challenges. As part of this, we built up a clear understanding of the scheme’s benefit structure (which had multiple sections and a number of legacy benefit issues) and how this benefit structure interacted with the various individual calculations that were required.

Our review provided numerous recommendations for increasing the efficiency and robustness of the operations in place in respect of individual calculations, including the potential for further automation and changes to the approach taken for certain calculations. Following this successful project, we were engaged to provide additional input into the challenges that the trustee might encounter in undertaking GMP equalisation, which included recommendations for best practice and how best to proceed.

Covering maternity leave

The client has a pensions manager who carries out the secretarial duties as well as some company related work. The pensions manager was going on maternity leave and the company had been looking to recruit a temporary replacement. The recruitment campaign was unsuccessful, primarily due to being unable to find someone with a broad enough knowledge base to handle the expected forthcoming issues.

Barnett Waddingham offered to help with this role, with an experienced administrator working in their office for two days a week. The client was attracted by the fact that even if the individual concerned did not have all the skills and knowledge required for every aspect of the role, they would have direct access to the wealth of knowledge within Barnett Waddingham.

Provision of urgent short-term resource

Barnett Waddingham provides actuarial services for the client and the administration is undertaken in-house by one individual. From our discussions with the client, the client is aware the pension administration set-up involves a number of risks. This was borne out when their sole administrator was unexpectedly absent with an unknown date of return.

However, we were able to provide an experienced administrator to the company within just a few days to support them through this difficult period, working in their office two days a week. In this case, the absence wasn't as prolonged as expected and they were soon able to return to normal in the knowledge that their administration had been well looked after in the intervening period.