UK - The volume of buyout transactions will rise to £5bn (US$7.9bn) in 2010 as prices become lower and more stable, the Society of Pension Consultants predicted.
The trade body said it is seeing "convincing signs" that pensions restructures and de-risking strategies such as buyouts would return to life strongly in 2010.
It said de-risking still remains the key issue for sponsoring employers and credit spreads have narrowed during 2009 enabling buyout pricing to lower and become more certain.
SPC president Duncan Howorth said: "I expect buyout transactions in 2010 to rise to £5bn. We have had a number of discussions about the shape of the pensions market with our members and the signs are that corporate activity involving pension schemes will become a prevalent feature of M&A in 2010."
This comes a week after the Merchant Navy Officers Pension Fund has insured around £500m of its pension liabilities through a bulk annuity buy-in deal with Lucida (Global Pensions, September 30, 2009).
And it also comes after the announcement Jessops was set to sell its main operating company to a special purpose vehicle owned by its bank, pension scheme and an employee trust (Global Pensions, September 29, 2009).
The SPC said such deals demonstrated that resolving pension deficit problems remained an active issue.
Howorth added: "We are seeing increased activity again, the appearance of capital to finance deals and the acceptance of innovative solutions and we anticipate the return of the buyout market next year.
"Lucida received additional shareholder capital of £80 million to help the MNOPF deal, and the transformed Jessops business shows that the Pensions Regulator is prepared to support corporate re-structures that improve an employer covenant. In the case of Jessops, this innovative solution avoids a further call on the PPF."
The Pension Protection Fund (PPF) is consulting on proposals to charge a "risk reflective" levy for commercial defined benefit (DB) consolidation vehicles.
The funding gap across FTSE 350 schemes could be slashed by as much as £275bn if schemes look beyond traditional ways of creating value. Victoria Ticha examines how
There will be "many flavours" of defined benefit (DB) consolidators but consolidation will only be the right answer for a minority of schemes, Alan Rubenstein says.
Work and Pensions Committee (WPC) chairman Frank Field has questioned the regulator on what lessons it can learn from the experience of the Kodak Pension Plan No.2 (KPP2).