Annuities remain cheaper than gilts, continuing the trend started in the middle of last summer according to the latest Aon Hewitt Bulk Annuities Market Monitor.
Commenting on the research, Paul McGlone of the Risk Settlement Group at Aon Hewitt said: "Aon Hewitt’s Bulk Annuity Market...
The options for offloading a defined benefit scheme are on the increase. Allison Plager reports on what the derisking market has to offer
What is the main stumbling block for a company trying to negotiate a deal with another company? The answer is the defined benefit (DB) pension scheme. Even if the scheme has been closed to new entrants and accruals, it is still an unknown quantity – effectively a blank cheque – that no...
The Trustee of the Pilkington Superannuation Scheme has insured against the risk of 11,500 current pensioners in the scheme living longer than expected, with around £1bn of associated liabilities, with Legal & General.
At the same time as entering into this agreement, Legal...
The ITV Pension Scheme has entered into a longevity swap with Credit Suisse.
Under the contract announced today, the ITV Pension Scheme will make fixed monthly payments to Credit Suisse. In return, Credit Suisse will make payments to the scheme that broadly match the value of benefits being...
Enhanced annuities are a more cost effective way of de-risking for smaller companies advises Andrew Megson, Partnership
A female born today in the village of Moreton Hall on the outskirts of Bury St Edmunds in Suffolk can expect to reach the age of 119.
Within that nugget of information, supplied by the Office for National Statistics (ONS) (1), lies a clue to the current agitations afflicting UK sponsors and...
Tony Barnard, Capita Hartshead, looks at the options for de-risking a pension scheme which is preventing a company from expanding
Although Goodman & Sons is ambitious and keen to extend, its pension scheme is currently a financial burden, hindering growth. This article examines what options are available and how it can control the risks associated with the scheme. While budgets are likely to be limited, there are...
De-risking is firmly established on the agenda for pension scheme trustees with 89% regarding it as important to overall business objectives according to a MetLife Assurance survey of 122 trustees.
Their recognition of the importance of de-risking has been driven by the economic events of the...
The covenant comparison is key to pension plan buyouts, says Akash Rooprai, Mercer
A key consideration when buying out defined benefit pension liabilities is the strength of the chosen insurer’s financial covenant, compared to the existing overall covenant supporting the pension plan. It is not always a straightforward comparison but a robust investigation can help you...
Fraser Smart, Buck Consultants, explains why trustees and sponsors should work together on managing defined benefit liabilities
With so many schemes moving into the “end game” phase as they close to future accrual, the key issue is how long it will take for sponsors to eliminate all of the liabilities. For some businesses, this has become a major focus since they recognise the premium placed by financial...
Protection against longevity risk has finally become a reality explains Andrew Ward, Mercer
Those following the fortunes of pension schemes over the last decade will be well acquainted with the concept of risk. Fluctuations in equity and credit markets and adverse movements in discount rates have hit funding levels and required additional contributions. Nonetheless, most sponsors and...
Allison Plager, financial journalist, reports on the de-risking options currently available to pension schemes
Remember the good old days? Defined benefit pension schemes used to be – well, maybe not a joy to run, but nowhere near the headache they are now. For a start, the problem was not what to do about the deficit, but how to deal with the surplus (the days of employer contribution holidays are...
UK pension schemes are now knuckling down for a long hard journey, with 69% of schemes regarding de-risking of both assets and liabilities as a main priority according to latest research from Aon Hewitt.
Its global pension risk survey of over 200 UK pension schemes, representing assets of over...
John Hodgson, Mercer, says enhanced transfer values can be in members’ interests
Recent uncertainty over both pension indexation and the ultimate contents of the Pension Regulator’s revised guidance has put many enhanced transfer value (ETV) exercises temporarily on hold.
Following clarification in these areas, a burst of ETV activity seems likely, with many trustees...
David Ellis, Mercer, on why you need a broker and not just a consultant
Across the UK, interest in transferring defined benefit (DB) pensions risk to the insurance market is once again gaining in popularity. Perhaps consideration is being given to the purchase of a bulk annuity, a longevity swap or a similar product. Whichever product is decided upon, the services of...
Mike Safo, Aon Hewitt, charts the changing attitudes towards pension risk
Final salary pension schemes have surged to second place in the list of risks faced by employers; this is a significant rise since the last Aon employer survey when pensions ranked only eighth in the list of threats. The market environment is the biggest risk facing employers as can be seen from...
Almost three quarters of defined benefit scheme sponsors expect to focus on reducing investment risk in their pension plans during the next five years, according to a Towers Watson survey of UK chief financial officers and finance directors. Only 17% place a greater emphasis on achieving...
The new tables published by the industry-wide Continuous Mortality Investigation (CMI), show that the life expectancy of members of occupational pension schemes has again exceeded expectations. An extra £5bn of liabilities will go onto UK pensions.
However, this average increase...
Prudential UK has entered into two bulk annuity buy-in contracts with the trustees of the GlaxoSmithKline (“GSK”) Pension Scheme and the GSK Pension Fund for a tranche of pensioner members within their defined benefit pension schemes.
The transactions cover around 15% of GSK’s...
A total of £9bn of pension scheme risk transfer deals have been completed in the year to 30 September 2010.
The market for buy-in/buy-outs during the year to 30 September 2010 was dominated by Rothesay Life and Pension Insurance Corporation (PIC), which both took around 30% of market...
