A self-sufficiency approach is not riskless and trustees must consider covenant strength and longevity exposure. Chris Ramsey looks at the key considerations of running schemes on.
Insurers are now able to accommodate up to £30bn of bulk annuity transactions every year with no impact on pricing, according to Lane Clark & Peacock (LCP).
The value of UK bulk annuity deals is set to quadruple in the 2020s when compared to this decade, Mercer has predicted.
Greater regulatory focus on covenant, holistic risk management, and long-term targets has helped proactive schemes approach their endgames earlier, says Adolfo Aponte.
There has been a 30% reduction in the number of small scheme buy-in and buyout transactions, highlighting how insurer attention has shifted towards larger deals.
Small schemes are facing “obvious challenges” in grabbing insurer attention as “jumbo” deals are beginning to typify the bulk annuity market, Aon says.
FTSE 100 risk settlement transactions have reached £70bn as a third of these firms remove longevity risk, according to Aon.
This week’s top stories include Thomas Cook’s four pension schemes being poised to enter a Pension Protection Fund assessment period.
Defined benefit (DB) schemes should act now to insure members’ benefits before an “anomaly” in the markets is corrected, Prudential Retirement has said.
Growing market volatility could adversely affect defined benefit (DB) schemes nearing buyout over the next five years, Barnett Waddingham says.
Legal & General (L&G) has entered into an agreement with US law firm Locke Lord for a £35m buyout of UK-based Edward Wildman Palmer pension scheme.
Rothesay Life has completed £3.7bn of bulk annuity transactions so far in the second half of this year, according to its latest trading update.
Almost all UK defined benefit (DB) schemes (92%) have set clear long-term funding targets, with most focused on buyout or self-sufficiency, according to Aon.
Just Group is exploring a defined benefit (DB) de-risking partnering approach as part of the development of a capital light fee business, according to its half-year results.
The majority of pension schemes that are using a long-term funding target are focused on self-sufficiency, Aon research has revealed.
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
Around £17.5bn of buy-ins and buyouts were transacted in the first half of the year as market records continue to tumble.
The Plumbing and Mechanical Services (UK) Pension Scheme has completed its 2017 valuation, calculating scheme assets were enough to cover 102% of its liabilities.
Prudential Insurance Company of America (PICA) has launched a reinsurance counterparty, lending support to insurers that account for more than 90% of the UK pension risk transfer market.
Tendencies to prefer the status quo and familiar names can result in slower or more irrational decisions, Aon says. James Phillips explores the impediments to risk settlement.
This week's top stories included The Pensions Regulator launching a consultation on the future of trusteeship.
Rothesay Life completed around £700m of bulk annuity transactions in the first half of 2019, according to its latest trading update.
Lane Clark and Peacock (LCP) has predicted the total volume of buy-ins and buyouts will surpass £15bn in the first half of this year, more than double 2018 H1 volumes.
Pension Insurance Corporation (PIC) has so far racked up £5.8bn of buyouts and buy-ins with defined benefit schemes this year, while reinsuring £7bn of longevity risk, it has revealed.