Pensions - Articles - Pension endgame strategies

 As part of the PMI’s role in supporting innovation on topical issues and delivering expert viewpoints to members, the PMI develops Insight Partnerships with organisations considered thought leaders and industry experts. In this capacity, Insight Investment will take a lead in communications activity around Pension endgame strategies, including a session at the PMI’s Trustee Workbench conference on 6 June in London, which will explore some of the key considerations for endgame de-risking planning. 

 Gareth Tancred, Chief Executive of the Pensions Management Institute, commented: “Last year was a record for bulk-annuity deals and this trend is set to continue, while the emergence of commercial consolidators and other buy-out alternatives means schemes need to think carefully when considering their de-risking options.

 “Against this backdrop, we are delighted to be working with Insight Investment to help our members keep abreast of the latest thinking around whether to buy-in or not to buy-in all or part of their scheme assets.”

 Serkan Bektas, Head of Client Solutions Group at Insight Investment, explained: “Given the significance of the decisions facing pension schemes today, we are delighted to partner with the PMI to share our analysis and discuss the pertinent issues involved so trustees are informed and equipped to navigate their endgame options.

 “De-risking decisions can be as complex as they are critical. For example, at first glance, a pensioner buy-in may appear to be a step towards a full buy-out by securing payments for some scheme members. However, in the context of the whole scheme, a buy-in may result in a riskier asset strategy and lower hedge ratio for the residual liabilities, extending the time it takes to achieve a full buy-out. It is therefore critical that schemes fully consider overall value for money, the impact on their total portfolio and whether sufficient flexibility has been retained to deal with risks that are not easily hedged.”