NEWS   |    May 30, 2023

Jane Kola comments on the growing capacity challenges in the pension risk transfer market

UK pension schemes are now in a better position than ever to buy out their liabilities with insurance companies, although a number of issues have emerged as demand for risk transfers increases.

Partner Jane Kola commented on the growing capacity challenges, stating: “We are seeing schemes which are genuinely ready to go to market receive fewer quotes but none have been left empty-handed. There is clearly some smart insurer management of resources with some insurers only willing to quote if the deal is exclusive to them or prioritising schemes they already have a relationship with. It is possible that market access could be squeezed late this year and next as more schemes become market ready.”

Jane further added: “Once there is a surplus, particularly if it’s material and the scheme has no choice but to run on while it queues for the buyout market, it’s inevitable that some schemes and their sponsors may feel that the generation of surplus for the benefit of the sponsor and members may be a beneficial approach without material risk.”

Read Jane’s comments in Law360, here.

The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. Arc Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.

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