After numerous acquisitions, Tyco International found itself with 20 distinct defined benefit pension plans at its U.K. businesses in 2003. The decentralized administration was cumbersome and lacked economies of scale, making it disproportionately expensive. Moreover, says David Charlot, director of capital planning and asset management, "the risk and effort were compounded as U.K. pension regulations were rapidly changing in reaction to significant funding deficits in many of the largest plans in the country."

In response to a clear need for change, the U.K. Common Investment Fund (CIF) was born. Over three years, Tyco's treasury led an initiative to leverage corporate investment expertise and the scale of the assets across the plans, while still providing each with the flexibility to tailor its investment policy.

When a turnkey solution couldn't be found, the company built its own program from scratch through a collaborative effort of various constituencies. Led by treasury, Tyco created the investment pooling structure with its customized investment units each chosen to fill a specific role within an overall strategy. Developing this framework included the establishment of a governance structure, administration process (now outsourced), unitization methodology, cost sharing arrangements and reporting structure.