Finding cash efficiencies and saving on pensions

Even if there seemed to be a dismal outlook for the UK economy, delegates at the ACT annual conference were able to gather lots of sound advice on how they could do their own bit to help their companies weather the storm ahead.

The lack of bank lending capacity was certainly one theme but cash management and cash conservation was addressed in a direct response to this. In practical sessions, whether on treasury technology, risk, pensions and obviously cash management, the recurrent message was to focus on better use of cash within your group.

The Aon sponsored session on pensions concentrated on how cash could be saved for the sponsor, at least for a while to help see the company through a cash crisis. Cash saving ideas came thick and fast, some painful for the employees but in a crisis you have to find the least bad solution, including:

• closing or redesigning a scheme
• suspending pension accruals for a period - perhaps with a promise to make good later
• renegotiate the payment profile of any recovery programme payments and putting in place alternative security arrangements
• PPF levy mitigation through addressing the risk-based element dependent on sponsor solvency
• advisor fees, bit with the caveat not to cut the genuine compliance element
• consolidate group schemes, even if funds are kept sectionalised, there could be savings on trustees, advisors and administration.

By Martin ODonovan