Pensions De-risking

Pensions De-risking

Overview

Our market-leading practice advises trustees and employer sponsors on all types of pensions risk transfer transactions, including longevity deals, and full or partial buy-ins and buy-outs. We help clients understand the jargon and latest products so they can consider whether these are the right options for their scheme. 

As schemes mature more trustees and sponsors are seeking insurance solutions to manage pension scheme risks and volatility. These are among the most significant and longest-term transactions that pension fund trustees will enter into, with major implications for member security and for trustee and employer exposure to any ongoing risk.

All of our specialists have extensive experience of working with pensions clients on large and complex transactions and exercises.  This is a fast-developing area and we are at the cutting edge of market practice.

We integrate closely with our clients' project teams and their other advisers for maximum efficiency and to provide holistic advice, so that our clients have a full understanding of the transaction – not just the workstreams involved and how it will run, but also what the longer term implications for our clients will be.

As well as insurance transactions we have a wealth of experience advising on risk management investments such as derivative contracts (find out more about our pensions investment practice and security structures to support scheme funding).

We help clients to identify and deal with the issues, including:

  • assessing and managing counterparty risk
  • treatment of member data
  • the systems and processes required to support and monitor collateral regimes
  • how closely a contract matches liabilities and how much this really matters (including “all risks” buy-outs and “perfect” hedges)
  • whether liabilities can be reshaped (see more about liability management)
  • how longevity or buy-in contracts fit with a scheme’s overall strategy and diversification of investments
  • direct access to the reinsurance market
  • the impact of Solvency II regulatory capital requirements on existing or new contracts
  • the implications of risk-management transactions for eventual buy-out
  • whether trustees will be properly discharged from their obligations after buy-out.