Pension risk transfer deal storm ahead

airborne_bike_risk_410Risk transfer deals by corporate pension schemes reached £9bn by September this year and, according to consultancy Hymans Robertson, a storm of new deals is due to flood the market. Market analysis carried out by Hymans Robertson revealed that during the fourth quarter of 2010, risk transfers are expected to be well in excess of £1bn and several multi-billion pound pension scheme longevity swaps currently being tendered are expected to complete in the first half of 2011. The consultancy said nine FTSE 100 companies completed material risk transfers with Next being the ninth. The company it completed a £124m buy-in with Aviva during Q3 2010. Hymans Robertson expects a tenth FTSE 100 company to complete a risk transfer deal before the end of 2010.

James Mullins, senior liability management specialist, at Hymans Robertson, said: “Hymans Robertson’s analysis illustrates that Q3 2010 is the calm before the storm for the pension scheme risk transfer market. Indeed, many of the banks and insurance companies acknowledge that they are currently devoting serious resource to around 20 large pension scheme risk transfer projects.

“We expect one in four FTSE 100 companies to have completed a material pension scheme risk transfer deal by the end of 2012. This is due to a number of drivers. One is that market conditions have improved over the last year which, coupled with the change to the CPI inflation measure, means that risk transfer deals are more affordable for many UK pension schemes.” ©2010 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.