UK - The number of employees whose defined benefit (DB) pension schemes are held by buyout players will rise to 180,000 by the end of the year, HSBC Actuaries and Consultants (HACL) has predicted.
Jonathan Sarkar, head of corporate consulting, HACL, commented: "The increase in insurers' appetite to take on longevity and sponsor risk means that that there is now a wide range of solutions available to companies wishing to transfer liabilities away from a final salary pension scheme.
"The traditional "buyout" is now simply not innovative enough for most plan sponsors. By focusing on helping our clients understand these new products we have been instrumental in facilitating pragmatic pension risk transfer solutions for a number of schemes."
Earlier this month, Aon consulting had questioned the capacity of the market to handle high levels of demand for buyout of defined benefit (DB) pension schemes, after it conducted a study revealing an 80% surge in buyout activity in the second quarter (www.globalpensions.com: 06/08/08).
The company's research showed the market reached a value of £2.7bn (US$5.3bn) as financial conditions were continuing to make buyout look attractive to pension schemes.
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Investment consultants and fiduciary managers should expect a final decision on the investigation into the market to be published by the end of the year, the competition watchdog says.