Broadstone launches dedicated service for trustees and sponsors of defined benefit schemes with legacy insured contracts

Broadstone, a leading independent pensions consultancy, has launched Broadstone CARE – a specialist service designed to support trustees and sponsors of defined benefit (DB) schemes that remain in legacy insured contracts.

Many DB schemes hold historic group pension contracts with insurance companies. However, over the years, developing regulation and financial conditions have caused insurers to reduce the services they offer, outsource to external providers and in extreme cases, withdraw from the market altogether.

The contracts were designed in a different time and have unusual benefits, guarantees, investment structures and charges. As a result, trustees and sponsors have been left with complicated schemes, that often feel neglected, suffer potentially high costs and are difficult to exit due to the complexity of the guarantees.

Broadstone CARE follows a simple, four‑stage framework – Collate, Analyse, Recommend and Execute – providing trustees and sponsors with clarity, structure and certainty around costs. It is a full-service proposition that explains the contract and analyses solutions before offering clear advice and effective execution.

The objective of Broadstone CARE is to ensure value is maximised from the contract, whether by retaining it or exiting to Broadstone. In either scenario, the trustees and sponsor will be fully supported to achieve their objectives.

Chris Rice, Head of Trustee Services at Broadstone, commented:

“Legacy insured contracts were a great idea when they were initially set up, providing a ‘one stop shop’ for all services and including valuable investment guarantees.

“However, the evolving regulatory environment and financial conditions have caused insurers to look at ways of reducing their exposure to these contracts, encouraging exit, outsourcing, removal of services or even withdrawing from the market entirely.

“It is important that these schemes receive the necessary, specialist advice to maximise value from either running or exiting the contract and receiving services from a dedicated and attentive team of experts. Broadstone CARE seeks to achieve this and offers a comprehensive process to ensure trustees and sponsors can evaluate their options and maximise value.”