Case Study: Cutting DB Pension Scheme Costs by 30% with Sole Trustee Model

Introduction

This case study explores how a well-known charity significantly improved the efficiency and cost-effectiveness of its DB pension scheme costs. With just over 150 members and approximately £18 million in assets, the scheme was evenly split between deferred members and pensioners.

The scheme was previously managed by a well-known consultancy operating under an bundled model, with separate provision of administration, actuarial and investment services. Dalriada had been part of the trustee board prior to transition.

Following strong performance in 2022, the scheme’s funding position improved significantly and currently stands at around 100% on a gilts +0.5% basis.

Challenge

The sponsor had become increasingly concerned about rising DB pension scheme costs and deteriorating service levels.

Service levels were deteriorating, with frequent member complaints and declining responsiveness from the administrator. Repeated escalations had little impact, and the trustees felt the scheme wasn’t receiving the attention it needed.

Administration costs were rising, and projects such as GMP equalisation and data rectification were billed as additional services, often leading to delays and unexpected costs. Regular adviser overruns of around £5,000 per quarter added further pressure.

The historic fixed fee had risen to £155,000 per annum, out of step with the service being delivered and increasingly difficult to justify.

Solution

The scheme transitioned to the Dalriada.Together model, allowing the sponsor to appoint a sole trustee and consolidate administration, governance, actuarial and investment oversight under one roof.

Dalriada assumed full responsibility for running the scheme, including secretarial and administrative services. A new advisory panel was appointed on clearly defined terms, with budget visibility and fixed costs agreed from the outset.

Two previous trustees remained involved in a consultative capacity, helping to preserve scheme knowledge and support member communications.

The integrated approach allowed for stronger governance, tighter cost control, and faster decision-making.

Benefit

Appointing Dalriada as sole trustee enabled quicker day-to-day and strategic decision-making, directly reducing the cost and complexity of scheme management. Compliance and governance standards were immediately elevated to meet Dalriada’s professional trustee framework.

An effective system of governance (ESoG) was implemented from the transition date, supported by a wider risk and governance structure to ensure all statutory requirements are met.

As scheme secretary, Dalriada introduced robust budget oversight, with regular reporting of actual versus expected adviser fees - helping the sponsor maintain financial control.

Dalriada also assumed full responsibility for administration. Member queries are jointly handled by the trustee and administration teams, who work in close alignment. With both teams co-located, service level agreements are consistently met and payroll is delivered smoothly and on time.

Results

The scheme’s annual fixed fees fell to £105,000, a 30% reduction compared to the previous year.

Administration and trustee services now operate under a single, aligned team, allowing member queries to be resolved more efficiently and consistently. Service levels have improved significantly, with quarterly metrics showing 100% SLA compliance since transition.

Out-of-scope adviser fees have been eliminated, and the sponsor now receives clearer financial reporting and real-time oversight of scheme performance.

Dalriada.Together has helped the sponsor regain confidence in the scheme’s management, with a stronger relationship between trustee and employer and a more stable platform for long-term decision-making.