Buyout players to secure 1m members’ pensions

Almost 200,000 DB scheme members in the UK are now in schemes secured by pension buyout companies, according to research by HSBC Actuaries and Consultants. The firm estimates this could rise to between 500,000 and 1m by the end of 2009.

This follows the Prudential’s bulk annuity buyin insurance agreement with the trustee of the Cable & Wireless Superannuation Fund in relation to the pensioners “in payment” element of its DB scheme. The book covers approximately 5,000 members with assets of just over £1bn.

Tony Rice, Cable & Wireless group finance director, said: “We are delighted that the pension scheme trustee has secured this transaction which effectively reduces the scheme’s exposure to liabilities by over £1bn.”

Steve Dicker, Watson Wyatt, the lead adviser on the transaction, says: “Looking ahead we expect more transactions on this scale – though some schemes will start with do it yourself approaches to reducing risk before turning to the insurance market in many years’ time.”