Returns are in danger of diminishing for defined benefit pension schemes as interest rates remain low. Members living longer than expected is another key risk for sponsors; as life expectancy rises so have pensions costs, putting pressure on business accounts. Pension risk transfers are becoming more common in recent years as companies look for new ways to de-risk their pension liabilities. However, volatility in equity markets and low gilt yields mean that sponsors may not be in a position to execute a full buyout, instead keeping their schemes in-house. What are the advantages of farming out a pension scheme to an insurer compared to a run-off ? What impact do risk transfers, especially buy-ins, have on a scheme’s other investments and ability to generate returns? What investments should schemes aim to hold in preparation for a transaction? Are superfunds a viable alternative for schemes?
This confidential editorial dinner, organised by the Financial Times Group and Pensions Expert in association with Pension Insurance Corporation, will bring together Chief Financial Officers from a range of sectors to discuss which schemes are better off with a risk transfer and which might be better served with a run-off, and to compare different scheme transaction options in terms of cost and risk.