16 December 2009
Published in: Longevity - mortality
Pension buy-outs and buy-ins total £3.4bn in 2009
The volume of pension buy-outs and buy-ins to date this year totals £3.4bn, according to Lane Clark & Peacock. Pension Insurance Corporation (PIC) has written £1bn of this total. The figures include PIC's latest deal, just announced: a £500m pensioner buy-in for the Cadbury Pension Fund under which the fund trustees have outsourced the key risks for pension liabilities - investment risk, inflation risk and the risk of members living longer than expected.
In addition, this year has seen £3.2bn of longevity swaps, which transfer solely the risk of members living longer than expected. The latest deal was announced yesterday by the Royal County of Berkshire Pension Fund (see IERM, Longevity/mortality, 15 December, Swiss Re enters first public-private longevity risk transfer).
Clive Wellsteed, partner at Lane Clark & Peacock, commented: "Buy-ins and longevity swaps have rapidly become a standard part of the toolkit for companies to reduce legacy pensions' risk. Further deals will close over 2010 as schemes that postponed activity in the height of the financial crisis now reach completion."