Pensions de-risking to surge in 2015, Towers Watson claims

Pensions de-risking to surge in 2015, Towers Watson claims

The number of company pension schemes entering into longevity swaps and bulk annuity deals will increase over 2015, according to research by Towers Watson.

Ian Aley, head of transactions at Towers Watson, said that despite the higher volume of deals, the total value of these deals in unlikely to exceed the unprecedented levels seen in 2014.

He said: “We are noticing a big increase in the number of pension funds who want to de-risk their liabilities in the next 12 months.

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“The practice has become more established over the last few years and with strong demand from insurers and reinsurers, prices are attractive, making it a good time to secure a deal.

“2015 is likely to be characterised by an increase in small and medium-sized deals taking place as innovative new structures emerge providing easier and more cost-effective access to the longevity hedging and bulk annuity markets.”

Last year saw a record £35bn of liabilities hedged as well as the largest ever single transactions for both longevity swaps and bulk annuities.