Corporate pension schemes are set to transfer more liabilities to financial institutions through so-called bulk annuity deals than they have in any year since the financial crisis.
Insurers wrote £3.9bn worth of the deals in the UK in the third quarter alone as companies turned to them to end the instability that ballooning pension deficits bring to their balance sheets. A series of deals struck between insurers and pension schemes at companies including EMI Music Group, Philips and InterContinental Hotels added up to the highest quarterly value of such transactions on record.
It has put pension schemes on track to transfer between £7bn and £8bn worth of liabilities through such arrangements in 2013, the highest in five years, according to the consultants JLT Employee Benefits.
