Pension Escrow Solution

For pension schemes and sponsors
on their journey to buy-out.

Home / Pension Escrow Solution

ZEDRA brings together its expertise in Pensions and the provision of Escrow services to provide an Escrow solution for pension schemes of all sizes.

Our streamlined service has taken out the complexities and cost traditionally associated with escrow. It is an ideal solution for sponsors of pension schemes wanting to mitigate the risk of a “trapped surplus” whilst on the journey to securing a bulk purchase annuity with an insurer.

The service is streamlined, cost effective and efficient to set up. It is accessible to schemes of all sizes and we can work with all of your existing advisers.

ZEDRA’s escrow services are provided via our Financial Conduct Authority authorised and regulated entity Zedra Trust Company (UK) Limited, with the option of escrow funds being held with a UK banking institution with Tier 1 capital adequacy or the ability place funds on permitted Money Market funds.

Our in-house pensions and escrow expertise provide clients with peace of mind through standardised legal terms accessible for schemes of all sizes.

Why consider an Escrow solution?

  • Standardised, pre-approved legal documents specific for Pension Schemes targeting a risk transfer with an insurer.
  • Direct recourse to cash for trustees held securely and separately from an employer’s assets. This can help demonstrate to insurers that funding is available and strengthen your case when engaging with the insurer market.
  • Contingent funding can get you better levels of engagement with insurers. This can be particularly important for smaller schemes who can find insurer engagement challenging.
  • Security and certainty with pre-agreed “triggers” for the release of funds held within the Escrow arrangement if certain events occur.
  • Prevention of sponsor over-funding of the pension scheme by reducing the risk of trapped surplus.
  • Accessibility for schemes of any size with documents readily available, and written specifically to support an insurer transaction.
  • Added security for trustees against the risk of a sponsoring employer going insolvent, providing funds to cover unknown expenses typically associated with a bulk purchase annuity.
  • Certainty of availability of additional funding – even at short notice – to fund a transaction.
  • Create tax efficiencies in respect of the authorised payments regime for funds returned to sponsoring employers.
  • Complete flexibility on contributions or withdrawals as agreed between the parties.
  • Adapt and modify use in anticipation of a risk transfer and or to hold deferred premiums.

Find out more

To discover how our Escrow Solution can streamline your path to buy-out, contact Alan Greenlees or Sue Wakefield.

Contact us

Alan Greenlees

Client Director, ZEDRA Governance