Author: Mark McCord

Gilts-based investment approach is feeding through to the prices offered to pension schemes entering BPA transactions by insurers.

The latest data on excess mortality in England, published by the Office for Health Improvement and Disparities, shows that there were significantly fewer deaths among the older cohorts and the working-age population as well.

The past 12 months have seen significant developments that are likely to shape mortality models among defined benefit pension scheme managers and sponsors alike, and possibly even have an impact on the pricing of de-risking deals.

The past 12 months have seen significant developments that are likely to shape mortality models among defined benefit pensions scheme managers and sponsors alike, and possibly even have an impact on the pricing of de-risking deals.

TPT Retirement Solutions’ plan to launch a run-on superfund has been welcomed by industry figures for offering a potentially lucrative alternative for defined benefit pension schemes other than a buy-in/buy-out pension risk transfer solution.

Reasons abound as to why the inclusion of illiquid assets in the portfolios of defined benefit pension schemes can be a hindrance to the process of completing a bulk purchase annuity buy-in or buy-out in the UK but insurer appetite to capitalise on the booming pension risk transfer market means that any resistance is not as pronounced as it was previously.

A year after the UK Pensions Regulator’s code of practice on funding for defined benefit (DB) pension schemes was launched, the UK’s pension risk transfer market remains buoyant, suggesting the guidance has had little material effect on deals.

Traditionally, PRT transactions in the US are of the buy-out variety, a trend driven by the economics of no longer having to administer participants after the deal closes and the expenses associated with it. However, there is evidence to suggest that the buy-in variety is growing in popularity.

The increasing frequency and magnitude of cyber-attacks on British businesses have prompted the UK’s pensions industry to consider its own resilience, especially during de-risking processes when scheme members’ data is at a heightened state of vulnerability.

Recent M&A activity could continue as market continues to boom.