Published date: 17 May 2018

Last edited date: 17 May 2018

Awarded contract - This means that the contract has been awarded to a supplier.


Closing: 19 February 2018

Contract summary

Industry

  • Pension fund consultancy services - 66523000

  • Financial management consultancy services - 79412000

Location of contract

West Midlands, London

Value of contract

£0 to £70,000

Procurement reference

PROC.01.0600

Published date

17 May 2018

Closing date

19 February 2018

Contract start date

26 February 2018

Contract end date

31 March 2018

Contract type

Service contract

Procedure type

Call-off from a framework agreement

A mini-competition or direct purchase from a pre-established framework agreement.

Contract is suitable for SMEs?

Yes

Contract is suitable for VCSEs?

No

Description

The targeted review will consider:

• How do pension scheme deficits as calculated under International Financial Reporting Standards (IFRS) compare to actuarial deficits calculated under a triennial actuarial valuation in absolute terms and variability?
• Have companies used customer funding to the extent provided for at PR09 (and reaffirmed at PR14) to meet deficit repair costs since 2010?
• What range of actions have companies taken to manage their exposures to pension liabilities, how effective have these measures been in managing risks and what else could companies have done?
• How does the management of the pension deficit in the water sector compare with best practice approaches in other sectors?
• What evidence is there that pension schemes have or are moving to CPI or CPIH as the inflation linkage?
• Pension costs impact on financial resilience as they reduce the free cash available to meet a company's statutory obligations. A short repair period increases the pressure on free cash while a long period may result in action by the Pension Regulator. Does the essential service provided by water companies and economic regulation underpin the water sector's covenant for pension obligations and strengthen pension scheme resilience?
• Rating agencies consider deficits when assessing credit ratings and effectively treat deficits as debt. How should deficits be considered when assessing a company's financial resilience?
• Hypothetically, how would pension liabilities be considered under a special administration pursuant to the Water Industry Act 1991 (as amended)?
• We would welcome additional comments from the contractors on areas to consider not covered by the above.

Scope
The scope of this work includes assessing published information on all 17 English and Welsh water and waste water companies' pension schemes and preparing an information request for all companies. Following this review selecting a number of companies which display a variety of actions in managing pension liabilities for further engagement and lead tele-conferences with the selected companies. The number of companies will not exceed 5. To consider and report on the specific questions set out in this ITT, relating to company behaviours and actions associated with pension deficits which have since 2009 been funded in part by customers.

More information

Attachments

Award information

Awarded date

23 February 2018

Contract start date

26 February 2018

Contract end date

31 March 2018

Total value of contract

£70,000

This contract was awarded to 1 supplier.

Barnett Waddingham LLP

Address

Silver Springs House
2 Topaz Way
Birmingham Road
Bromsgrove
B61 0GD

Reference

Companies House number: OC307678

Value of contract

£70,000

Supplier is SME?

No

Supplier is VCSE?

No

Additional details

Awarded value is the capped price of the project and can fall below

About the buyer

Address

Centre City Tower
7 Hill Street
Birmingham
B5 4UA
England

Email

mailbox@ofwat.gsi.gov.uk