Partner Jane Kola comments in Professional Pensions on how small DB schemes can compete against bigger schemes in the buyout market
In 2019 there were ten £1bn-plus bulk annuity deals, the first half of which saw 30% fewer sub-£100m deals. But small schemes can help insurers diversify their risk.
The giants of the pensions world – defined benefit (DB) schemes who measure their assets in billions – have little trouble offloading their liabilities to insurers, with ten mega deals of at least £1bn of liabilities each, exceeding £40bn last year. With such choice low hanging fruit, insurers have been accused of neglecting small schemes who may have dodgy data and a host of other problems.
Nimble footwork enables small schemes to compete with the big boys in the buyout market.
Jane Kola commented:
“Get onto the insurers’ radar by going to insurer training conferences and going on their mailing lists” is easy enough. Then “be ready to transact”. “That means having both a legally signed off benefit specification, including all benefit discretions codified as well as clean data, and put the governance structure in place to move quickly to transact when the moment arrives.”
Read Jane’s comments in Professional Pensions.
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.