Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly-owned subsidiary of Marsh & McLennan Companies (MMC) announced the launch of the Mercer Pension Risk Exchange (the exchange).

The exchange is a groundbreaking solution that helps plan sponsors execute group annuity buyouts in a shorter timeframe and in a more competitive pricing environment.

As the first platform of its kind, the exchange increases liquidity and price transparency by enabling plan sponsors to continuously monitor pricing and contract terms available in the group annuity market.

The exchange also provides sponsors with greater exposure to a wider array of insurers that could potentially act as transactional counterparts for a buyout.

"Market pricing changes continuously based on interest rates and insurers’ needs. The way to really know when the market is moving in a direction favorable to the sponsor is to monitor prices specifically for their plan. The exchange creates the platform for sponsors to do exactly this," said Jacques Goulet, President of Mercer’s Retirement, Health, and Benefits business.

The exchange provides real-time online annuity pricing and trigger monitoring, combining a suite of buyout advisory and execution services. These include:

Deal readiness: streamlining the process by creating an industry standard for data preparation and document specification.

Dynamic monitoring: monitoring prices and metrics in real time to identify when conditions are optimal to execute.

Execution support: providing comprehensive support to sponsors and fiduciaries to help navigate the complexities of the buyout execution – ranging from insurer due diligence and asset preparation through to contract negotiation.

"Though sponsors’ appetite to transfer pension risk is high, they face some barriers to execution. Lack of clear information about the true cost of a buyout, limited transparency and the fluctuation of market rates and plan dynamics are all major challenges," said Phil de Cristo, president and group executive of Mercer’s investment business.