BusinessPostCorner.com
No Result
View All Result
Thursday, June 5, 2025
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
BusinessPostCorner.com
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources
No Result
View All Result
BusinessPostCorner.com
No Result
View All Result

Corporate pension buyouts reach record volumes in US and UK

August 24, 2023
in Finance
Reading Time: 3 mins read
A A
0
Corporate pension buyouts reach record volumes in US and UK
ShareShareShareShareShare

Receive free Pensions updates

We’ll send you a myFT Daily Digest email rounding up the latest Pensions news every morning.

Companies are offloading their pension schemes to insurers at a record-breaking pace on both sides of the Atlantic, as higher interest rates provide impetus to the sector.

An estimated $22bn of US corporate pension liabilities were shunted over to insurance companies in the first half of 2023, while more than £20bn were publicly announced in the UK, according to a report from the UK’s Legal & General, one of the providers in the market. Both totals represent record hauls for the first half of the year.

Higher interest rates have sharply improved solvency levels for workplace pension schemes, making a so-called bulk annuity deal affordable for many more businesses, and testing capacity in the market. In such deals, companies pay a premium to transfer a chunk or all of their pension obligations off their balance sheet to an insurer.

Andrew Kail, chief executive of L&G’s institutional retirement division, said the market had reached an “inflection point” and the insurer “had been busy gearing up for increasing demand”.

The UK sector registered its biggest transaction on record earlier this year when insurer RSA, a unit of Canada’s Intact, announced that it had agreed to offload £6.5bn of its pension liabilities to Pension Insurance Corporation.

“The pipeline for the remainder of 2023 and beyond is the largest we have seen, and we are not alone in anticipating record market volumes for the full year,” L&G said on the outlook for its domestic market. The full first-half total, including unannounced deals, could have been as high as £25bn, it estimated, close to the £28bn transacted across the whole of 2022.

In a sign of the capacity squeeze on the UK market, L&G added that “insurers are having to prioritise cases that give them the best chance of securing a transaction and may not be able to quote on everything”.

Recommended

In the US, volumes are being driven by $1bn-plus transactions. L&G said there were four such deals in the first half of 2023. They included AT&T, which said in May it had offloaded $8bn of its pension obligations to US insurer Athene.

“We are expecting a similar number of large transactions to close in the second half of the year,” L&G said. Still, it cautioned that the number of large deals would have to increase to eclipse last year’s $52bn in overall deal value.

Regulators have raised concerns about the pace of buyouts, whether providers were being tempted to do deals outside their core expertise, and the risks of some of the reinsurance deals that they are building into transactions.

In a speech earlier this year, the Bank of England’s Prudential Regulation Authority, which oversees insurance companies, called for moderation “in the face of considerable temptation” to do deals.

Credit: Source link

ShareTweetSendPinShare
Previous Post

How HR teams can direct source talent to find the talent they need

Next Post

Raleon Raises $3.8M in Seed Funding to Transform Web3 Marketing with Innovative Engagement Tool, Embedded Quests

Next Post
Raleon Raises .8M in Seed Funding to Transform Web3 Marketing with Innovative Engagement Tool, Embedded Quests

Raleon Raises $3.8M in Seed Funding to Transform Web3 Marketing with Innovative Engagement Tool, Embedded Quests

Bitcoin Price Prediction: BTC Eyes Breakout on Trump ETF and Global Demand

Bitcoin Price Prediction: BTC Eyes Breakout on Trump ETF and Global Demand

June 5, 2025
Rachel Reeves defends decisions in spending review

Rachel Reeves defends decisions in spending review

June 4, 2025
US Steel workers see hope of job security in deal with Japan’s Nippon

US Steel workers see hope of job security in deal with Japan’s Nippon

June 1, 2025
XRP Price Prediction: Price Hovering Around .16 – Is XRP Building the Strength Needed to Break ?

XRP Price Prediction: Price Hovering Around $2.16 – Is XRP Building the Strength Needed to Break $3?

June 1, 2025
Eating more fiber could help reduce the amount of forever chemicals in your blood, study finds

Eating more fiber could help reduce the amount of forever chemicals in your blood, study finds

June 3, 2025
Bitcoin (BTC) 5K Triangle Squeeze: 3 Charts Point to 6% Rally Ahead

Bitcoin (BTC) $105K Triangle Squeeze: 3 Charts Point to 6% Rally Ahead

June 4, 2025
BusinessPostCorner.com

BusinessPostCorner.com is an online news portal that aims to share the latest news about following topics: Accounting, Tax, Business, Finance, Crypto, Management, Human resources and Marketing. Feel free to get in touch with us!

Recent News

Goldman Sachs reins in risk appetite as Donald Trump’s tariffs roil markets

Goldman Sachs reins in risk appetite as Donald Trump’s tariffs roil markets

June 5, 2025
BREAKING: Uber Explores Global Stablecoin Transfers as CEO Hails Bitcoin ‘Proven’ Store of Value

BREAKING: Uber Explores Global Stablecoin Transfers as CEO Hails Bitcoin ‘Proven’ Store of Value

June 5, 2025

Our Newsletter!

Loading
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2023 businesspostcorner.com - All Rights Reserved!

No Result
View All Result
  • Home
  • Business
  • Finance
  • Accounting
  • Tax
  • Management
  • Marketing
  • Crypto News
  • Human Resources

© 2023 businesspostcorner.com - All Rights Reserved!