The BPA process

The time period of a BPA deal can vary depending on the complexity and requirement of each scheme. The journey below sets out the key steps from start to finish.

How the process works for you

  1. The quote will detail the price, the benefits to be provided and any assumptions which the provider has made.

  2. Providers often offer tailored solutions according to the trustees' needs. The initial premium could be cash and/or asset transfer.

  3. The trustees buy the BPA from the provider and send the agreed amount to the provider.

  4. The provider may appoint a single point of contact to help trustees and clients through the entire process. Trustees' responsibilities and necessary actions also need to be clearly set out at this stage.

  5. How the provider makes payments to members:

    • In the case of a buyout, it's normal to make payments net of tax. This would be a direct payments from the provider to individual members.
    • For buy-ins, the provider can either pay members directly or make a single payment, gross of tax, to the scheme administrators. In the case of the latter the individual member will see no change and usually are not informed of the BPA itself.
  6. The quality of the data is all important. The more accurate the information supplied, the smoother the process will be. If there are any discrepancies from the original data then a corrective payment has to be made; this could mean the scheme needs to pay more or receive money back from the provider. A discrepancy could occur if members’ details have changed, i.e. an undeclared spouse who is entitled to benefits or if a member has passed away since the original quote was made.

  7. The benefits can still be revised at this point to reflect any data changes which may be needed.

    • Trustees receive a pre-finalisation pack to help them confirm final price and benefits.
    • The provider calculates the effect any adjustments may have on the final price.
    • The provider’s approach to assumptions needs to be entirely transparent, so pricing adjustments should never come as a surprise.
  8. In a buyout situation, the individual members become customers of the provider and are issued with all the relevant paperwork. They’ve become entitled to any customer benefits that the company may offer, i.e. discounts on other products.

  9. Customer Services will have been working closely with the Deal Management team throughout the process, ensuring a smooth handover.

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