Financial Education / IMI

Building for your future



Final acceptance rate


Year 1 uptake of cash offer


Year 2 uptake of cash offer

All Work

Multinational engineering company, IMI, was exploring ways to de-risk its DB pension scheme, which contained approximately 16,000 members.

To help better manage liabilities, IMI decided to overhaul its existing and long-established pension fund by splitting it into two new, specialist funds; one for pensioner members and one for deferred members.

Many members in the existing fund had a small level of pension benefits accrued. To reduce the liabilities in the new funds, the company wanted to offer such members either a Winding-up Lump Sum, or Trivial Commutation Lump Sum. If a member accepted this offer, they would receive a one-off payment, but would have no further benefits within the scheme. The client set an ambitious target of securing a 30% take up of the Lump Sum offers.




  • Change Communication
  • Digital Engagement
  • Financial Education & Retirement Saving

"'How can we control our ever-increasing liabilities?' It is a question that almost every Trustee Board of a Defined Benefit Pension Scheme has asked (or will shortly ask).”

IMI Trivial Commutation

The Challenge

The trend of de-risking exercises such as insurance ‘buy-in’, PIE, ETV and Trivial Commutation has gathered pace in the last few years, spurred on by companies like BAE Systems, BT, EMI, ICI, MNOPF and TRW completing deals covering billions of pounds worth of liabilities.

A survey of more than 40 of the UK’s largest private sector Defined Benefit schemes revealed this trend is going to continue upwards. Liability management was either important or very important to meeting de-risking objectives, according to almost 70% of schemes. Trivial commutation was the most popular method for schemes to manage their liabilities – almost a quarter (23%) had carried it out already, and 40% planned to do so.

By nature these exercises are very expensive for companies to run and complicated for members to understand. Member engagement and active participation is, for many of these exercises, key to whether it is deemed a success or failure. To put it simply, our goal was to inform IMI’s members about their options in a clear, simple, honest and personalised manner.

We knew that for members to engage with the offer we had to do more than put words on a page. The communications had to build trust, be honest and provide reassurance. To achieve this we needed a senior figure in the company to be the personality behind the offer, which is exactly what the willing Group Pensions Director did in a series of short videos.

IMI Trivial Commutation

The Solution

To start the process all members received a short newsletter outlining how they were individually affected by the fund split. The same newsletter also introduced members to the Lump Sum offers they were entitled to.

The videos conveyed why IMI was offering this deal and the thinking behind it – from the company and member perspectives, what the offer was and reiterate that it was completely up to the member what they did. A second personalised newsletter was then sent out to direct members to the videos on the website, ensuring members received the information in a variety of easy-to-digest formats.

The videos and newsletters were followed up with a personalised pack for members that explained their specific Lump Sum offer in more detail. The pack contained pre-populated forms and a pre-paid envelope to reduce any potential barriers preventing members from responding. As the deadline for decisions approached we worked with the scheme administrator to identify members who had not taken up the offer, then issued them with simple reminder postcards.

The Outcomes

The 2014 campaign’s final acceptance rate was 54%, far in excess of the ambitious original target of securing a 30% take up of the Lump Sum offers, set by IMI. The cash offers taken as a result of this exercise reached £25 million.

Because the campaign was so successful, IMI repeated the exercise in the following year, targeting the members who had not taken a payment previously. The second campaign took place in 2015 and the total cash offers taken reached £10 million, reducing the liabilities of the new fund set up considerably.

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Kayleigh Keogh