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| The
first choice for people
in pensions |
| 180,000 schemes part of de-risked market |
| The
boom in the buy-out market will mean the Defined Benefit (DB) pension
schemes of 180,000 employees in the UK will be secured by insurance
companies by the end of 2008, according to research by HSBC Actuaries
and Consultants (HACL). The buy-out market is expected to hit £12bn this year, and HACL believes the industry could see between 500,000 and a million people as part of de-risked schemes by the end of 2009. To date, the buy-out market has seen £5bn of business, and HACL said it has advised on £1bn of these risk transfers. “The fact we have passed one billion on risk transfers on which we have advised and the findings from our research that 200,000 people in the UK will be scheme members of pension funds secured by insurance companies by the year end, shows the growth and potential of the nascent buyout market,” commented Jonathan Sarkar, head of corporate consulting at HACL. “The increase in insurers’ appetite to take on longevity and sponsor risk means that there is now a wide range of solutions available to companies wishing to transfer liabilities away from a final salary pension scheme.” Sarkar added that he does not see the traditional buy-out market as innovative enough for most plan sponsors, and so HACL has been looking to ease pension risk transfer in its offerings to schemes. - Pensions Age August 2008 |