Data quality critical for schemes looking to de-risk

The quality and availability of pension scheme data is critical to schemes that are looking to complete bulk annuity deals, Willis Towers Watson senior director, Shelly Beard, has said.

Speaking to Pensions Age, Beard stated that one of the main concerns from insurers when looking to complete a bulk annuity transaction was whether the necessary scheme data was present and correct.

“Schemes should spend the money to make sure that their data is up to scratch,” she said. “Insurers are more comfortable taking on the risk [if the quality of data is good]”.

This year (2019) has been a record year for bulk annuity deals, with it being estimated that a total of £40bn worth of transactions could be completed.

“The bulk annuity market will probably remain at current levels, I think it will continue to be busy,” added Beard.

Beard believed that the record-breaking year was primarily driven by “funding levels improving more than people thought”.

Furthermore, member longevity is now seen by some as the largest risk in a pension scheme, with Beard saying that there were a number of swaps already in place and that there were “more in the pipeline”.

There was nearly £18bn worth of bulk annuity business placed in the first half of 2019, including the largest ever UK bulk annuity deal completed by Rolls-Royce with Legal & General for around £4.6bn.

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