As part of Heywood’s PRT Perspectives series, we’re speaking with leading voices from across the UK pension risk transfer (PRT) landscape to better understand how schemes, trustees, advisers and insurers are approaching today’s market.
| In this edition, we were delighted to be joined by Alan Baker. After working as a partner at Mercer for 10 years, Alan became a professional trustee in 2019 and since then has acted as trustee on pension schemes ranging from £7m to £30bn including the £5bn Boots Pension scheme which as chair he led through a full scheme bulk annuity transaction in 2023. In addition to insurance transactions, Alan has also worked with schemes considering run on and other end game strategies. |
In a conversation with Heywood Business Development Director, Mark Williams, Alan brings a timely and thoughtful perspective on the evolving role of trustees in delivering successful bulk annuity outcomes.
MW: Where do you see trustees having the most influence on outcomes in today’s PRT market, and what unique value do they bring to the process, particularly when working alongside advisers, administrators or insurers?
AB: The role of the trustee is to set the strategy and the overall direction, working closely with advisors, but ultimately, it’s the trustees that must own that strategy.
PRT transactions are complex projects with various stakeholders at each stage, and the trustee needs to support the interactions and the agreement between those stakeholders, which in turn helps a project to progress smoothly. It’s the relationship between the trustee and sponsor that is critical to success, and that all boils down to clear communication, a comprehensive understanding of the project and clarity around strategy that together contribute to better outcomes.
MW: As The Pensions Regulator (TPR) looks to extend its oversight of professional trustee firms, do you think the spotlight on relevant expertise, decision-making, independence and adviser relationships is likely to prompt any changes in behaviour in relation to PRT activity?
AB: It’s now more important than ever to have a clear audit trail of advice and decisions. With more options on the table, trustees need to consider a wider range of approaches, not just insurance, which makes the process more complex.
That puts a premium on experience and training. Trustees need the right knowledge and support to take ownership of decisions, and that ownership is key to delivering good outcomes.
MW: How has your definition of “transaction readiness” evolved over the past 12–18 months? For example, what key characteristics give you confidence a scheme is ready to approach insurers?
AB: Data and benefits are key as they give you confidence about pricing. By data and benefits, I mean that they’re well understood and documented, and that any issues around accuracy are addressed. The more uncertainty about either data or benefits, the more uncertainty about price and that that can make it quite challenging both for the sponsor and the trustee.
Though, there are times when you do need to go ahead when this work has not been completed, which means you must be mindful of how that will delay later stages beyond a buy-in, for example. So, you can do it either way, but in my view, if you want an easier life, then upfront effort is definitely worth it.
MW: With timelines compressing and deal volumes holding steady, how are you managing resource and delivery across multiple transactions? Are there specific approaches or tools you’ve found helpful in navigating this busy period?
AB: Strong project management is essential. From a trustee’s perspective, it’s about clearly understanding who’s leading each stage of the process, whether that’s preparing for a transaction or moving from buy-in to buyout. That second phase, in particular, has seen real progress in recent years, with advisors building specialist teams to support trustees more effectively. As a trustee, you can’t manage every detail, so it’s about having the right people in place and staying informed throughout.
MW: How are you approaching GMP equalisation (GMPe) in the context of transactions? Many schemes are leaving GMPe until post buy-in, do you see this aspect being a growing challenger to timelines for achieving full buy-out and if so, are there opportunities to involve independent specialists with this aspect?
AB: It comes back to data and benefits, GMPe is part of that and if you get GMPe completed either ahead of, or as part of a buy-in transaction itself, then it gives so much more process certainty for everyone, including the sponsor, whilst also avoiding later delays.
But if you don’t have the time then clearly you can go ahead and do it later, but with that comes pressure at later stages as you move toward buy-out. I'm seeing a lot more third-party support coming into play to help with GMPe and data work, utilising technology-led solutions to get this work done. As we all know, administrators are under a lot of pressure, so it’s often productive and cost-effective to bring in that third-party support, albeit working in close collaboration with incumbent providers.
MW: Lastly, where do you see the biggest opportunity for technology to add value in the PRT market? Are there areas where better tools, automation or insight could unlock greater efficiency or stronger outcomes for schemes and trustees?
AB: Technology can really help with project tracking, making sure everyone knows their role, timelines are clear, and decisions are recorded properly. It also helps avoid confusion over different versions of documents or data.
Linking this to funding and market data would add even more value, helping trustees make quicker, better-informed decisions.
I also see real potential in using technology for data translation to map onto Insurer templates and for automating the population of benefits specifications. These aspects are often slow and manual, but the right tools can speed things up and improve accuracy.
Many thanks to Alan Baker for joining and sharing insights on the trustee’s role in today’s PRT market.