Reducing Key Person Risk in Pensions Through Outsourced Pensions Management

Summary

This case study shows how one organisation improved efficiency and governance by reducing key person risk in pensions through an outsourced, team-based model.

Introduction

Gill Howard, an experienced in-house pensions manager, was solely responsible for overseeing a large pension scheme. Without internal support, she managed everything from administrative tasks - such as arranging meetings - to high-level strategic planning, including setting the scheme’s long-term direction. The breadth of these responsibilities created significant challenges, particularly in terms of efficiency, sustainability and key person risk.

Through discussions with Leanne Coomber, Head of Pensions Management at Dalriada, Gill recognised an opportunity to work more effectively by leveraging the support and structure of a specialist pensions management team.

Challenge

Gill’s role encompassed every aspect of pension scheme management, stretching her across a wide range of responsibilities. The lack of additional resources led to inefficiencies and presented a considerable risk to the business and the scheme trustees. If Gill were unavailable due to illness, annual leave or resignation, key pensions functions - including governance, compliance, and member communications - would be disrupted.

Beyond the operational risks, maintaining an in-house pensions function as a standalone role presented financial challenges for the company. Without access to a wider support network, the organisation was exposed to high costs and potential knowledge gaps in the event of a transition. These challenges made reducing key person risk in pensions a strategic priority.

Solution

Through regular discussions with Leanne, Gill explored an alternative model - one that balanced continuity, efficiency and strategic oversight. Leanne explained how Dalriada’s team-based pensions management approach could reduce key person risk in pensions while enabling Gill to focus on high-value responsibilities.

Recognising the benefits of a structured support system, Gill proposed a transition to Dalriada, where she could continue managing the scheme with access to a broader team of pensions specialists. The company agreed to the move, ensuring continuity for the scheme while reducing operational risk.

Benefit

The transition provided immediate advantages for both Gill and the company:

• Reduced Key Person Risk: The scheme no longer relied on a single individual, ensuring resilience and continuity in governance and administration.

• Enhanced Support and Efficiency: With access to Dalriada’s infrastructure and resources, Gill could focus on strategic planning while a dedicated team handled administrative and compliance tasks.

• Cost-Effective Pension Management: By outsourcing pension management, the company found a more efficient and scalable solution, improving value without compromising expertise.

This transformation was a key step in reducing key person risk in pensions while increasing the sustainability of the overall management structure.

Results

With Dalriada’s support, Gill’s role became more focused and sustainable, allowing her to dedicate more time to strategic decision-making. Routine tasks - such as preparing meeting packs, coordinating advisers and maintaining compliance records - were efficiently managed by the team.

For the company, outsourcing to Dalriada created a more structured, scalable and risk-resilient framework. This case study illustrates how reducing key person risk in pensions through outsourcing not only safeguards scheme continuity but also enhances governance and long-term performance

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