Lucida - Pension Scheme Insurance Solutions

Lucida is a specialist insurance company offering a wide range of solutions to the financial risks associated with corporate defined benefit pension schemes.

As defined benefit pension schemes are increasingly becoming a legacy issue, we understand that the risk exposure and associated pressures can distract from a company's core business and detract from the analysts' appreciation of how management is performing.

Our solutions enable company management to focus on running their business by:

• Providing protection against interest rate, inflationary and longevity risks
• Removing balance sheet and P&L volatility as well as the risk of future increases in company contributions
• Transferring the administrative burden to Lucida

In addition, our solutions provide trustees and members with an increased level of security.

Pension de-risking solutions

Lucida's solutions range from insuring a specific risk or section of a pension scheme through to the immediate removal of all pension risks. Our solutions include:

• Pension scheme buy-ins: an insurance policy is purchased as a pension scheme investment that fully matches part, or all, of the scheme liabilities
• Pension scheme buy-outs: an insurance policy is purchased that transfers the legal responsibility to pay the pension scheme members to Lucida. This enables the pension liabilities to be removed from the company balance sheet
• Progressive buy-out: a series of insurance policies are purchased over time for sections or portions of a scheme ultimately leading to full buy-in or buy-out. This approach delivers the flexibility to customise the programme of de-risking to fit the scheme's funding plan or to take advantage of prevailing market conditions to selectively de-risk
• Day one risk transfer: an immediate removal of risk whilst also passing the burden of winding up the pension scheme to Lucida

We pride ourselves on our ability to design and deliver the optimum solution for each company's specific needs and have a track record of implementing innovative solutions and building long-term relationships.

Affordable pension solutions

We offer a huge amount of flexibility in terms of how the cost of the insurance premium can be met. For example, part of the premium could be deferred for a number of years.

This delivers immediate risk transfer but with the flexibility to stagger the timing of payment - for example, to match existing contribution commitments. Under such an approach, de-risking solutions do not necessarily mean accelerating or increasing cash contributions and may enable a de-risking solution to be implemented without selling assets at unattractive prices or reducing a pension scheme's exposure to return-seeking assets.

Complete pension solutions

Lucida can extend the insurance policy to cover other types of pension-related risks the company or trustees may be exposed to, including data risk, wind-up risk and GMP equalisation risk.

Lucida can also remove the administrative burden by taking on the primary relationship with the individual scheme members. This is delivered by a team of experienced pensions administrators and managers with a track record of outstanding customer service.