1. www.pensions.ymca.org.uk YMCA PENSION & ASSURANCE PLAN Presentation On behalf of the Principal Employer

2. www.pensions.ymca.org.uk YMCA PENSION & ASSURANCE PLAN Managing the Risk of Triggering a Full Buyout (Section 75 Statutory Debt)

3. www.pensions.ymca.org.uk BACKGROUND What triggers a Statutory Debt Regulator calls in the debt Ceasing to exist Voluntary request Last Employed Deferred Member leaves

4. www.pensions.ymca.org.uk STATUTORY DEBT Major risk to Participating Employers - Last Employed Deferred Member (EDM) Leaves

5. www.pensions.ymca.org.uk PARTICIPATING EMPLOYERS with EDM Since 01 May 2007 4 have triggered a Statutory Debt 2 have voluntarily triggered a Statutory Debt 54 have seen a reduction in their EDM

6. www.pensions.ymca.org.uk OPTIONS ON TRIGGERING A STATUTORY DEBT Pay in full Enter into a Trustee withdrawal arrangement Seek approval from the Pensions Regulator on a different withdrawal arrangement Last resort – orphan liability created

7. www.pensions.ymca.org.uk MANAGING THE RISK Currently Pensions Regulator deems the Plan NOT closed One major step could be taken to close the risk

8. www.pensions.ymca.org.uk PARTICIPATING EMPLOYERS with EDM 11 have only 1 EDM 23 have only 2 EDM 13 have only 3 EDM 42 have between 4-9 EMD 10 have 10+ EDM

9. www.pensions.ymca.org.uk SIZE OF THE RISK (as at 01 MAY 2008) Gross Buyout £122,500,000 Assets £49,360,000

10. www.pensions.ymca.org.uk TRENDS – EMPLOYED DEFERRED MEMBERS 01 May 2005 - 729 Active 01 May 2006 – 635 Active 01 May 2007 – 701 EDM 01 May 2008 – 598 EDM 31 December 2008 – 523 EDM

11. www.pensions.ymca.org.uk TRENDS – EMPLOYED DEFERRED MEMBERS Between May 2007 & December 2008 178 EDMs have left. This Represents a 25.5% reduction over 20 month period

12. www.pensions.ymca.org.uk Implications for Employed Deferred Members Pension link with final salary at retirement ceases, change to terms & conditions required As a deferred member - annual revaluation of pension benefit EDM cannot be worse off than a deferred member Mainly impacts on those receiving above inflation pay awards or internal promotion Major impact on pension entitlement already happened – service ceasing to accrue

13. www.pensions.ymca.org.uk SUMMARY Governance risk for Movement Over 25% reduction in EDM since May 07 47% of active PE have only 1-3 EDM Fewer PE to share orphan liabilities Since Sept 2005, 7 PE have triggered statutory debt Breaking Link with final salary closes THE major risk of triggering a statutory debt Requires the agreement of all PE

14. www.pensions.ymca.org.uk WHAT NOW