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The Actuary The magazine of the Institute & Faculty of Actuaries

PZ Cussons appoints Mercer for pensions de-risking task

The trustees of the UK £140m PZ Cussons Retirement Benefits Plan have appointed Mercer on an implemented consulting basis to provide them with a dynamic de-risking service.

In a statement the firm said that PZ Cussons had been conducting an overall strategic review of its defined benefit pension risks. Having identified a long-term target and agreed this with the trustees, both parties were looking for a way to implement their aims and start to address the risks within the existing investment and funding strategies. Mercer’s solution provided them with a robust framework for achieving this, with clear lines of accountability for the implementation, the firm said.

Brandon Leigh, group finance director at PZ Cussons, commented: "We closed our defined benefit pension plans in 2008 and had been looking at ways of reducing the risks associated with our legacy arrangements. Various liability management options had been put in place as a step towards addressing these risks, but the majority of the liabilities still remained in the plans."

Mr Leigh added: "Mercer’s dynamic de-risking service [allowed” a gradual reduction in the investment risk being taken as the plans move towards our eventual long-term goal. By delegating the responsibility for daily monitoring and implementation of an agreed strategy to Mercer, we have also been able to ease the governance demands associated with managing the plans."

Dan Melley, head of Mercer’s Dynamic De-risking Solution added: "The PZ Cussons trustees join a growing number of schemes who are seeking better ways of managing their defined benefit financial risk. We are delighted to be working with them in this way."