ACT Methodology
Our comprehensive approach to analysing sponsors and their DB pension schemes and identifying opportunities for ACT solutions.
Overview
The ACT methodology is designed to identify UK companies with defined benefit (DB) pension schemes larger than £10m, that could materially benefit from your innovative pension solutions. Our approach combines live data from multiple authoritative sources, sophisticated analysis techniques, and expert judgment to assess the propensity of companies towards adopting a partnership with ACT.
Data Collection
Comprehensive data gathering from Companies House, pension scheme returns, financial statements, and other public sources.
Financial Analysis
In-depth analysis of company financials, pension scheme funding, and covenant strength.
Propensity Scoring
Proprietary algorithm to calculate the likelihood of a company benefiting from ACT solutions.
News Analysis
Continuous monitoring of news and corporate announcements for relevant developments.
Data Sources
Our methodology relies on high-quality data from multiple authoritative sources to ensure accuracy and comprehensiveness.
Companies House
We collect detailed information about UK companies, including financial statements, director information, and corporate structure. This data helps us understand the financial health and governance of potential sponsor companies.
The Pensions Regulator
Data from scheme returns and other regulatory filings provides insights into pension scheme characteristics, funding levels, and compliance status.
Financial Statements
We analyze annual reports and financial statements to extract key metrics related to pension obligations, funding status, and corporate financial health.
News and Corporate Announcements
Real-time monitoring of news sources, regulatory announcements, and corporate press releases helps us identify relevant developments and potential triggers for action.
News Sources
Our comprehensive news collection system gathers information from a wide range of reliable sources to ensure we capture all relevant developments related to companies and their pension schemes. We collect news across multiple categories including business performance, trading updates, executive changes, pension scheme developments, and more.
Financial News Sources
- Financial Times
- Reuters
- Bloomberg
- The Economist
- Wall Street Journal
Industry-specific Sources
- Pensions Age
- Professional Pensions
- IPE (Investment & Pensions Europe)
- Pensions Expert
- Actuarial Post
- MallowStreet
- Pension Funds Online
Business News Aggregators
- Google News Finance API
- Yahoo Finance
- MarketWatch
- Morningstar
Company-specific Sources
- Company investor relations pages
- Regulatory news services (RNS)
- London Stock Exchange announcements
News Categories Monitored
- Business performance updates
- Trading and financial results
- Board-level executive changes
- Pension scheme trustee changes
- Pension advisor appointments
- Buy-in and buyout transactions
- Covenant strength indicators
- Regulatory developments
- Industry trend news
Pension Advisor Sources (UK)
- Mercer
- ISIO
- LCP
- XPS
- Hymans Robertson
- Barnet Waddingham
- Willis Towers Watson
- Dalriada
- Independent Governance Group
- Law Debenture
- Vidett
- Capital Cranfield
Suggestion: Consider adding the smaller pension consulting firms if we are looking at the sub £100m sized schemes.
Propensity Score Calculation
Our proprietary propensity score indicates the likelihood that a company would benefit from and be interested in innovative pension solutions. The score ranges from 0 to 100, with higher scores indicating greater propensity. The scoring methodology is tailored to each client's suite of products – in this example, those of a pension consulting business, professional trustee business, operational consolidator and pension systems software business.
Division-Specific Scoring Approaches
Pension Consulting Scoring
Focus: Actuarial, investment, and pensions consultancy services
- Funding ratio (25%)
- Upcoming valuation (20%)
- Covenant deterioration (20%)
- Recent key stakeholder change (20%)
- Advisory fee competitiveness (15%)
Emphasis on recent changes in key stakeholders, recognising their substantial influence on decisions to appoint new advisers.
Professional Trustee Company Scoring
Focus: Independent professional trustee services and governance expertise
- Trustee board transitions (25%)
- Regulatory interventions (25%)
- Recent key stakeholder change (20%)
- Covenant risk (15%)
- Governance complexity (10%)
- Scheme event occurrence (5%)
Recent key stakeholder changes have high weighting, reflecting their influence on trustee governance decisions.
Operational Consolidator Scoring
Focus: Operational consolidation services for trust-based DB and DC schemes
- Operational complexity (30%)
- Cost reduction pressures (25%)
- Recent key stakeholder change (20%)
- Governance burden (15%)
- Scheme consolidation potential (10%)
Focus on schemes with high operational burden and cost pressures that would benefit from consolidation services.
Pension Systems Software Scoring
Focus: Comprehensive scheme administration services with advanced technology platforms
- Scheme size and complexity (30%)
- Recent operational reviews (20%)
- Recent key stakeholder change (20%)
- BPA transaction involvement (15%)
- Administration cost efficiency (10%)
- Insurer/Consolidator engagement (5%)
Recent key stakeholder changes significantly influence administration strategy and outsourcing decisions.
Key Drivers and Triggers
Common Drivers Across All Divisions
- Funding and Actuarial Complexity
- Regulatory Compliance Requirements
- Cost Management Pressures
- Governance and Risk Management
- Covenant Risk Assessment
Key Triggers Monitored
- Valuation Cycles - Upcoming triennial valuations
- Adviser Replacement - Changes in professional advisers
- Key Stakeholder Changes - CFO, Chair of Trustees, etc.
- Regulatory Interventions - TPR engagement or scrutiny
- Operational Reviews - Administration efficiency assessments
- Financial Distress Indicators - Covenant deterioration
Enhanced Monitoring System
Our monitoring system tracks multiple early warning indicators:
Personnel and Stakeholder Changes
- Key stakeholders approaching milestone birthdays
- Anniversary dates of key appointments
- Key advisors approaching milestone anniversaries
- Media quotes on pension matters by key stakeholders
Operational and Strategic Events
- Data cleansing exercises
- Buyout level funding achievements
- New code LTO disclosures
- Regulatory engagement notifications
Score Interpretation
| Score Range | Interpretation | Recommended Action |
|---|---|---|
| 85-100 | High propensity for ACT solution | Immediate outreach and detailed proposal |
| 70-84 | Good propensity for ACT solution | Proactive engagement and initial proposal |
| 60-69 | Moderate propensity for ACT solution | Monitor closely and prepare for engagement |
| 0-59 | Low propensity for ACT solution | Periodic review for changing circumstances |
Business Areas & Buyer Behaviour Analysis
Our Group comprises four distinct business areas, each targeting specific market segments with tailored solutions. Understanding buyer priorities and triggers is crucial for effective engagement.
Pension Consulting
Drivers
Trigger Events
Corporate Sponsors: Prioritize governance efficiency, capital release, streamlined decision-making. Triggered by corporate transactions and cost pressures.
Lay Trustees: Focus on risk transfer, endgame planning, succession planning. Responsive to regulatory changes and recruitment difficulties.
Professional Trustees: Emphasize expertise delivery, regulatory compliance, scheme optimization. Triggered by complex scheme challenges.
Pension Systems Software
Drivers
Trigger Events
Scheme Administrators: Prioritize operational efficiency, technology integration, cost management. Triggered by regulatory changes and operational reviews.
Actuaries: Focus on technical accuracy, risk assessment, compliance requirements. Triggered by valuation cycles and regulatory updates.
Technology Directors: Emphasize digital transformation, system integration, data analytics. Triggered by technology upgrades and efficiency initiatives.
Operational Consolidator
Drivers
Trigger Events
Lay Trustees: Prioritize cost efficiency, shared expertise, collaborative governance. Triggered by budget constraints and resource limitations.
Professional Trustees: Focus on economies of scale, standardized processes, collective solutions. Triggered by multiple scheme management needs.
Professional Trustee Company
Drivers
Trigger Events
Lay Trustees: Seek independent governance, conflict resolution, expertise gaps filling. Triggered by governance crises and regulatory pressure.
Professional Trustees: Focus on scheme optimization, risk management, regulatory compliance. Triggered by complex scheme challenges.