In order to eliminate all pension risk exposure, a sponsor can secure the pension scheme benefits with an insurer.
Under a “buy-in” arrangement, a specified part of the liabilities of a scheme are secured with an insurer, eg liabilities relating to all pensioners or a specified tranche/section of members. The liabilities remain in the scheme, but the scheme holds a corresponding insurance policy as an asset.
Under a “buy-out” arrangement, the liabilities of the scheme, along with all associated risks, are fully transferred out of the scheme to the insurer.
Our commercially focused team has extensive experience advising sponsors and scheme trustees on all aspects of such transactions, including: