Total pension schemes merger

The issue

Following the merger that led to the creation of the global oil company TotalFinaElf, now known as Total, the company’s UK operation was left with 13 separate pension schemes. As part of the post-merger integration process, Total wanted to consolidate these schemes into one. There were clear advantages in doing this including:

  • Reduced costs
  • Reduced management time spent on the pension schemes
  • Greater control over financial and operational risks
  • Greater control over pension aspects of any future sales or purchases

Our approach

For this very complex project, Total wanted a lead pension adviser with the strong technical and project management skills necessary to reduce project risk and save time, cost, and coordination effort. Total chose PwC to deliver the wide breadth of services that the project would require, including advising on merger strategy, investment, benefit design, administration, vendor selection, tax and audit.

We began the project by conducting a feasibility study of the legal and funding constraints pertaining to the current pensions schemes. After examining options and coming to agreement on the preferred solution with the Managing Directors of each business unit, we helped obtain Board-level approval from Total's headquarters in Paris.

Our specialists worked closely with Total and its legal advisers to implement the preferred solution. PwC specialists also co-led project implementation teams that negotiated with the pensions’ trustee boards and analysed technical issues surrounding pension scheme administration and the introduction of new defined contribution sections.

Later during the project, we played a key role in communicating project plans to the senior management and pension stakeholders and provided technical content to related employee communications.

The outcome

At the end of the project, Total had consolidated their 13 pension schemes into one overseen by a trustee board and employer representative body. With around £1bn in assets, and almost 15,000 pension members, the new scheme represents one of the most complex pension scheme mergers to take place in the UK. The project had fulfilled all of Total’s objectives, including:

  • Achieving a significant saving in running costs through the reduction of administration, adviser, and investment fund manager charges
  • Increasing control over pension policy and the funding of the scheme
  • Reducing risk through clear communication and decision paths and centralised control mechanisms for operating the funds
  • Creating an in-house pension center of excellence