Expects that the trustees and sponsors of defined benefit pension funds will drive the market for pension risk transfer solutions
Pension Corporation, a provider of risk management solutions to benefit pension funds, expects that the trustees and sponsors of defined benefit pension funds will drive the market for pension risk transfer solutions to over GBP10 billion in 2009.
This would suggest a growth of 25% over the 2008 market, which saw just over GBP8 billion of pension insurance transacted.
Pension Corporation’s Pension Risk Transfer Index underscores the conviction that this year the primary focus for trustees and sponsors seeking risk transfer solutions will be longevity.
Pension Corporation estimates that longevity risk transfer will account for up to 60% of the market by year end. In 2008, the focus was on full pension insurance buyout, or to a lesser extent, pensioner buy-ins.
The Pension Risk Transfer Index lays bare the volatility in asset values which, when combined with increasing liabilities, is a reason for pension fund trustees and sponsors to look at interim steps to full buyout (such as longevity risk transfer). These interim steps help to bring certainty to pension fund members to their benefits until they can afford full buyout.