Poll of 300 schemes shows substantial funding boost

Four-fifths say they will now be carrying out buyout-related work within two years

Jonathan Stapleton
clock • 1 min read
XPS Pensions Group risk settlement partner Jo Carter
Image:

XPS Pensions Group risk settlement partner Jo Carter

Some 95% of schemes have seen an improvement in buyout position, with nearly a quarter of funds reporting an improvement of more than 20%, a poll conducted by XPS Pensions Group finds.

The consultancy polled representatives from 300 pension schemes at a recent event - asking them about how their schemes' buyout position had changed following recent market turbulence.

Of those 95% said they had seen their buyout position improve, with 23% seeing an improvement of more than 20% in their position - and some 79% said they would begin carrying out buyout-related work within the next two years.

XPS Pensions Group risk settlement partner Jo Carter said: "Recent market moves have created some interesting dynamics in the bulk annuity market. With rising interest rates, the level of insurer premiums is falling and so insurers need to write more or larger transactions to hit their target volumes.

"However, bandwidth constraints at insurers mean they are becoming more selective when deciding which schemes to bid for, focusing on well prepared schemes with a high degree of execution certainty.

"For those schemes pursuing buyout but concerned about attracting insurer attention, it's important to monitor the market closely for opportunities, be flexible on timing and consider whether partnering with one insurer could deliver better results. For smaller schemes in particular, a streamlined approach could make the difference."

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