Over one million members of defined benefit (DB) pension schemes will receive their pension from insurance firms by 2017 as more companies and trustees de-risk their pension liabilities using insurance, according to the fifth annual LCP Pension Buy-ins, Buy-outs and Longevity Swaps report.
The report reveals that 2011’s record levels of activity brought total market volumes to £40bn since 2006, with £12.3bn worth of business transacted over 2011 alone, a 50% year-on-year increase. Over 500,000 DB members now benefit from an insurance policy – either through a buyin policy held by the trustees or a buyout policy in the member’s own name – with numbers increasing by about 100,000 a year.
Clive Wellsteed, LCP, says "Pensions to members of DB pension schemes will be paid out over the next 50 years or more, but many schemes are de-risking over much shorter timescales."
Author: Pensions WorldPensions World is the leading monthly magazine for pensions professionals published by LexisNexis.