Our 2021 Global Pension Risk Survey revealed, for the first time, that buyout has become the preferred long-term goal for UK pension schemes. This has largely been driven by buyout affordability for many schemes improving significantly in the past few years. Key contributing factors have been investment performance, sponsor funding, member options projects and the maturing of closed schemes.
With endgame targets becoming more achievable and our survey also revealing that timescales to buyout are reducing, trustees and sponsors should act now to ensure they are fully prepared to take their next step and avoid the regret risk of missed opportunities by delaying action.
Choosing the best strategy can prove challenging but we are here to help. We have the largest team of risk settlement specialists in the UK, meaning our expertise and breadth of experience is unrivalled in the market. As such, we have been entrusted to act as lead adviser on around 40% of all risk settlement deals since 2019, which include both bulk annuities and longevity swaps, across a range of scheme sizes from £1M to several £Bn. With a range of expertise at our fingertips, we can provide complete solutions to schemes, including member options exercises, investment advice and due diligence services.
Our Journey to Settlement service enables trustees and sponsors to collaborate in establishing a joined-up strategy and document a plan of action over the coming years. By co-ordinating the multiple workstreams, we aim to deliver a smooth and stable journey to your endgame resulting in improved outcomes to trustees, sponsors and crucially your members.
The focus of this research was to gain greater understanding of the risk priorities of those UK DB pension schemes who are focused on settlement, and how these priorities have changed since the survey was previously conducted in 2020. The findings suggest that there remains a knowledge gap on the understanding of options available to help schemes reach their endgame target.
Download our report
Knowing where to start when forming a comprehensive endgame strategy for your pension scheme can sometimes feel like playing a game of chess — only you don’t know all the rules. Michael Walker looks at endgame options available to pension schemes in our first Pensions Endgame: Better Decisions article.
You have determined that buyout is your endgame destination and that your members and their liabilities will ultimately be passed to an insurer. But what does that really mean for your scheme and where are you on this journey. Andrew Cooper goes through the different steps to achieve the endgame in this latest article.
When will the COVID-19 mists begin to clear? Matthew Fletcher's article looks at the impact of the pandemic in his article.
A buyout is now the ultimate endgame target for many pension schemes. However, for those just starting on this journey, tackling the road to pension risk settlement can seem like navigating an obstacle course. Find out what Mike Edwards has to say in this latest article with Professional Pensions.
Many schemes choose buyout as their ultimate endgame, driven by the certainty that payments will be made to members as they fall due. However, any number of risks can blow schemes off course on their journey. Read the latest article from Lucy Barron.
If you are involved in the running of a pension scheme, you may be familiar with what a bulk annuity is, or what a longevity swap involves. But are you aware of the new risk transfer products that have entered the market recently? John Baines and Geraint Jones walk you through what's available in this latest article.
When preparing pension schemes for reaching their endgame, it is often difficult to know where to start and what to prioritise. While there are many common actions that need to take place across all schemes, it is important to focus on the actions that will have the biggest impact for your schemes. Charlotte Quarmby talks about the impacts for different scheme sizes in this article.
At the outset, getting to your pension endgame may feel like an uphill climb, with a constant looming threat of storms to hamper your progress. So, what measures can be taken to ensure a smoother path to the endgame summit? Jamil Merali and Gemma Cowan explore the options in this article.
With an increasing number of defined benefit (DB) pension schemes securing their benefits through an insurance transaction, there is now a growing focus on the member experience post transaction and how the secured DB pension annuity interacts with co-existing defined contribution (DC) arrangements. In this article Dominic Grimley shares insights on DC considerations when securing DB risk.
Many defined benefit (DB) schemes have significantly developed their liability hedging programmes in recent years, making them a critical part of their risk management journeys. In this article Dominic Grimley asks if they working as expected in this volatile year.
‘Failing to prepare is preparing to fail’ is a very well-known and used adage, but what are the repercussions of poor preparation for pension scheme buyout? Read the latest article from Hannah Brinton to find out more.
Most trustee boards now have their own ESG targets and considerations factored into their investment policies. So, when it comes to investing a significant amount of a scheme’s capital into a bulk annuity policy, ESG factors will come into play. Read what Lisa Varley has to say in our final article of the series.
Aon risk settlement experts were joined by three professional trustees to discuss their experiences of preparing for and executing risk settlement transactions across schemes of all sizes.
Joining Aon’s Charlotte Quarmby, Mike Edwards, and Lucy Barron are:
In this first video, the discussion focuses on setting long term objectives, and explores the first stages of the journey that schemes go on to reach their end goal.
In this second video, the discussion focuses on the key workstreams that need to be considered when journey planning, such as asset preparation, member data and member option exercises. Also discussed is the role of the advisor in this process.
In this video, the discussion focuses on completing risk settlement transactions, sharing insights on insurer engagement and key considerations such as residual risk, insurers ESG creditability and the member experience post buyout.
Helping You Navigate Pension Scheme Risk Settlement
Aon’s Risk Settlement Survey 2021
Factoring ESG Into Risk Settlement Decision Making.
The Solution for Smaller Bulk Annuity Transactions.
The short checklist will help you assess whether consolidation solutions might be right for your scheme.
2022 DC Pension Scheme and Financial Wellbeing Survey
Building on the results of previous years, it continues to focuson the level of support available to members at retirement and the changes schemes plan to make over the next year.
Our 2021/22 findings shine a spotlight both on the short-term impact of the COVID-19 pandemic for pension schemes’ risk priorities, and more crucially on long‑term trends for schemes.
