UK - Paternoster has launched a quarterly affordability index for pension funds looking to buyout the risks of their defined benefits plans.
During the first quarter of this year, the costs of securing a 'typical' segment of deferred members' liabilities fell by 10%.
The first index, published today, reveals the cost of buyouts has fallen significantly as a result of widening credit spreads but rising liquidity in April made speads tighten, causing the price of buyouts to rise by 3%.
Mark Wood, chief executive, Paternoster, said: "Clearly, the impact of market movements on the cost of securing liabilities can be significant and trustees and their sponsoring organisations should focus on this as they manage their process of evaluating a buy-out. The cost of 'missing the market' could be considerable."
PTL has appointed Karein Davie as a client director in its Birmingham office.
The level of interest rate hedging increased to £29.5bn of liabilities in the second quarter as pension funds continued to de-risk, according to BMO Global Asset Management's research.
UK inflation has risen for the first time since November to 2.5% in July, up from 2.4% in June, thanks to rising fuel costs and the price of computer games.
The number of DB pension scheme trustees targeting a buyout with an insurer has increased significantly in the past five years, latest research from Willis Towers Watson shows.