Browsing: Pension Risk Transfer

There has been significant activity in bulk purchase annuity buy-ins in the UK in recent years, which at some point will need to move to buy-out so that the original scheme can wind-down.

The bulk annuity market has high barriers to entry. Firms require significant long-term capital and specialist expertise, including asset sourcing, actuarial modelling and risk management, and regulatory approval is not straightforward.

Gareth Truran of the Bank of England’s Prudential Regulation Authority offers a regulator’s view of the UK bulk purchase annuity market.

Shelly Beard, Managing Director at WTW, offers her views on the state of play in the UK pension risk transfer market as we approach the halfway point of 2025.

The aggregate funding position of UK defined benefit pension funds potentially eligible for entry to the country’s Pension Protection Fund fell £13bn last month to £202.5bn, a funding ratio of 122.8%.

The transaction, completed in January 2025, secures the benefits of all 869 Scheme members which comprises 471 pensioners and dependants as well as 398 deferred members.

£280m deal secures the benefits of approximately 2,800 members.

During March, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process climbed from 101.7% to 102.5% of a plan’s accounting liabilities.

The £7.5m transaction secures the benefits of all 121 members, comprising 26 deferred members and 95 pensioner members, and covers all scheme liabilities.

The transaction was finalised in March 2025 and is the ninth buy-in for Royal London’s BPA business.