Our 2014 buy-outs and buy-ins report, published today, shows 2014 is set to be a record breaking year for bulk annuity transactions.
Gavin Markham, head of bulk annuity consulting commented: “While 2013 was the most successful year for the bulk annuity market since 2008, the market continues to strengthen and 2014 is already well on course for a record breaking year.
This year has already seen the largest ever buy-in transaction, with the £3bn pensioner buy-in agreed between Legal and General and the ICI Pension Fund. It wouldn’t be a surprise if last year’s total value of bulk annuity transactions of £7.5bn is considerably higher by the end of 2014”
The report, which advises employers and trustees on what they need to do in order to transact effectively, also asserts:
- the developing medical underwriting market is allowing increased options and lower cost de-risking opportunities for certain schemes
- the 2014 Budget announcements could result in a positive ‘knock-on effect’ for the bulk annuity market by increasing transaction affordability"
“This report will be useful for any scheme looking at the possibility of a bulk annuity transaction.
As well as providing an update of the latest market activity in this report, we also discuss the current market pricing and highlight some of the key issues that trustees and employers should consider when looking to carry out a bulk annuity transaction. We also describe some of the innovations that the insurers have developed to help facilitate transactions."