Pensions Risk Transfer

A risk transfer strategy or transaction could help secure certainty about your scheme’s future liabilities and member benefits.

Life as a pension scheme sponsor or trustees can be open to volatility driven by market movements, life expectancy changes and changing regulations.

Pension liabilities can be a drain on the value and prospects of many businesses, particularly with increasing scrutiny from the UK Pensions Regulator for UK pension schemes, and trustees will want to ensure full security for their pension scheme members’ pensions.

From a lay trustee perspective, it can be uncharted territory which requires external expertise to provide reassurance and experience.

But when is the right time to securely transfer risk out of your scheme, and what’s the best way to do it and the likely timescale?

We work with schemes to identify the right way to proceed for their specific needs and circumstances – every case is different. With our expertise and experience, underpinned by our technology, you can significantly reduce your pension risk.

Pension Buyouts & Buy-ins

Pension Buyouts are on the rise with market volatility and increasing gilt yields causing such transactions to be more affordable and more schemes within touching distance of their endgame solution.

Pension Buyouts provide trustees with assurances that members’ benefits are guaranteed and corporate sponsors can insulate themselves from future cashflow crunches.

Pension Buyouts eliminate risks of investment, longevity, interest rate changes, inflation, and future ongoing costs to the system. They generally cover all members of the system, both deferred and current retirees. A buyout transfers responsibility for benefits to insurers, removing the risk and associated liability from the trustees and sponsor.

Once a pension scheme has undertaken a buyout, the scheme will typically wind up.

But it’s vital that the right expertise is on hand to guide trustees and sponsoring employers through this process.

This is especially critical in an insurance market which has limited capacity and where triaging takes place on possible deals. Positioning your scheme well at the outset is more important than ever before. We know from insurers that schemes which have professional trustees and demonstrate good governance are viewed more attractively for buyout.

How ZEDRA can help

Our team of dedicated and experienced pension risk transfer specialists have completed £16bn worth of transactions for over 60 clients.

ZEDRA’s experience includes partial buy-ins, full buy-ins, longevity swaps, buyouts, windups (both DB and DC), and transfer to consolidators.

With 60 completed deals totalling £16bn of liabilities secured and experience working with all of the current market participants and advisers right across the market, as well as over 40 live projects ongoing covering in excess of £6bn of liabilities and in-house pension escrow capabilities, we’re perfectly placed to support trustees and sponsoring employers through Buyouts.

We’ll help you with:

• Journey planning, including investment de-risking
• Funding discussions with the sponsor and affordability for an insurance transaction
• Preparation and feasibility ensuring your scheme is in position to achieve the maximum level of insurer engagement
• Project and budget management thorough planning to deliver the critical steps within the desired timescales
• Price negotiation and deal structuring using our close insurer relationships and market knowledge to secure the best possible terms
• Discussions around discretionary benefits and possible return of surplus, which can be sources of conflict management within trustee boards

Get in touch to find out how we can help you.