UK - Prudential is set to sell its DB administration business to consulting actuary Hazell Carr in a bid to cut costs, senior industry sources have revealed.
They say the move will also enable the Pru to focus on its DC business.
One source from a leading life and pensions company said: “People involved with DB administration need a reasonable size to make it work.
Maybe Prudential have slipped below critical mass.”
He added that the move is part of a trend away from DB by the major life and pension companies who now see their future with DC pensions. In the future he predicted that firms will see DB as a “niche business”.
Other industry sources predicted that the acquisition of Prudential’s DB business by Hazell Carr - the 19th fastest growing UK company according to The Sunday Times - could prove to be lucrative.
Hazell Carr could have a potentially huge income from the wind-up of the DB schemes it inherits from Prudential.
Although Prudential declined to comment, it did confirm that it was currently conducting a strategic review of its business units.
Hazell Carr also declined to comment.
Additionally, sources say that Prudential has outsourced the administration of its staff DB schemes to Jardine Lloyd Thompson. Prudential currently operates three DB schemes - a £4.5bn scheme for Prudential staff, a £100m M&G employees fund and a £330m Scottish Amicable pension fund.
By Geoff Ho
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.