Risk transfer deals for final salary pension schemes reached their highest ever total value in the third quarter of 2009, according to Hymans Robertson.

The independent pension and benefits consultancy has reported that there was £4bn worth of buy-outs, buy-ins and longevity swap transactions that went through during Q3 2009. The value of buy-out and buy-in deals increased to £1bn and longevity swaps made £2.9bn, due to 'first of their kind' deals involving Babcock International and RSA Insurance pension schemes, revealed James Mullins, senior liability management specialist at Hymans Robertson.

"It seems clear," Mullins continued, "that Q3 2009 will be remembered as an important milestone for the longevity swap market. For example, as well as the completed deals already in the public domain, there is much more on the horizon with several of the longevity swap providers now having 'exclusivity' on other longevity swap deals worth well in excess of £1bn, which could complete in the next few months."

At the end of October, Towers Perrin also recommended that employers revisit de-risking strategies as recent market recovery failed to stabilise pension scheme deficits. The global professional services firm announced that FTSE 100 pension fund deficits increased by nearly £9bn over the month, which it has blamed on falling corporate bond yields and an increase in the expected level of future inflation.

"Clearly some pension schemes have fared better than others recently," said John-Paul Augeri, principal at Towers Perrin, "for example those holding higher equity allocations in their asset portfolios. But such employers urgently need to take stock of their current financial situation and use this opportunity to 'cash in and de-risk.' Specifically, companies that have the right governance in place to make speedy decisions are well placed to take advantage of any funding level recovery in their pension schemes and reduce their pensions risk."

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