In March 2016 Ofgem challenged network operators to consult with consumers regarding their approach to funding pensions schemes. As part of developing a consumer led pension strategy, we have worked with PWC to understand how we can develop a customer focused strategy for managing our pensions commitments.
The project comprised of 5 workstreams as follows:
The results of each of the five individual workstreams are documented in five individual reports. The purpose of each report is to document the methodology followed by PWC and WPD and the results of each workstream. In addition, the overall conclusions are summarised in a sixth report titled “Overall Conclusions”.
Workstream 1 Long-List of pensions strategies
Purpose: To identify the long-list of pensions strategies which could be adopted by WPD and determine their cost and risk profile for consumers
You can read the Workstream 1 report here.
Workstream 2 Derivation of a social discount rate for assessing UK electricity consumer preferences for bearing DNO pension cost and risk
Purpose: To determine a discount rate using the academic research carried out to date for the purpose of comparing the relative cost (from a consumer and society perspective) of each of the pension strategies identified in Workstream 1 .
You can read the Workstream 2 report here.
Workstream 3 Investigating UK electricity consumer preferences for bearing DNO pension cost and risk
Purpose: Use primary research techniques to:
- Validate and inform an amendment to the social discount rate determined in Workstream 2.
- Determine other relevant factors for the purpose of assessing consumers’ preferred pension strategy in Workstream 1.
You can read the Workstream 3 report here.
You can read the results of the bill payers survey here.
You can read the results of the focus groups here.
Workstream 4 Benchmarking of existing pension scheme funding strategies
Purpose: To provide relevant UK benchmarks for the funding of defined benefit pension schemes to provide additional validation that consumers’ preferences are capable of practical implementation.
You can read the Workstream 4 report here.
Workstream 5 Determining the optimal strategy
Purpose: To assess the long-list of pension strategies using the results of Workstreams 2, 3 and 4 in order to arrive at a pensions strategy arrived at using evidence based insights into the interests of consumers recognising that tomorrow’s consumers are as relevant as today’s.
You can read the Workstream 5 report here.
You can read the Overall Conclusions report here.