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Pensions & benefits

Report: Pension
de-risking 2018

Pension de-risking is stepping up a gear

LCP’s eleventh annual report on the buy-in, buy-out and longevity swap market concludes that de-risking through buy-ins and buy-outs has reached the highest level of affordability since before the banking crisis in 2008.  As 2018 begins, many pension schemes will be considering their priorities for the year ahead and opportunities to reduce risk are likely to be a key focus.

Our report shows that one in five FTSE 100 UK pension schemes are now estimated to be over 80% funded relative to the cost of buy-out with an insurer, up from one in eight a year ago. Our analysis also shows that average buy-out funding level has increased by nearly 10% since the immediate aftermath of the EU Referendum in August 2016. 

As a result of this improved affordability, we predict a marked increase in demand from pension plans to de-risk in 2018 but also an increase in insurer capacity to cater for higher volumes.

For pension schemes interested in de-risking, it's important to stay up to date with the latest developments and opportunities. Download the report now to stay at the forefront.

What's inside?

  • Review of 2017 and our predictions for 2018

  • Current pricing opportunities for buy-out and buy-in

  • How phased buy-in strategies provide cost effective de-risking for schemes working towards being fully funded

  • Understanding longevity risk and longevity swap structures

  • How longevity swap structures have evolved to reduce costs and better meet pension schemes' needs

  • New case studies of how LCP helped:

    • the Pearson Pension Plan to complete £1.2bn of buy-ins;

    • a multi-employer scheme to complete a £600m pensioner buy-in; and

    • a £30m scheme work through closure to accrual and subsequent full buy-out.

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How we can help

Buy-ins, buy-outs and longevity swaps

We are market leaders at each stage of de-risking, including planning, investment strategy, transactional services and wind up.

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Scheme wind up

We support trustees and employers through the complex process of winding up a scheme.

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Risk and liability management

We help companies manage and mitigate their pensions risks and costs.

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Pensions consulting for companies

We help companies navigate through the complexity of pensions provision.

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Pensions consulting for trustees

We help trustees achieve their strategic goals, with solution-led, appropriate advice.

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LCP LifeAnalytics

LCP LifeAnalytics is a unique tool that allows you to measure the longevity risk in your pension scheme.

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LCP Visualise

Our intuitive, real-time pensions technology allows you to see the information you need when you need it, helping you to make decisions.

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