Double the number of pension plans in the United Kingdom are preparing for buyout within the next 10 years than they were a year ago, according to delegates at a recent seminar.
Some 62% of delegates at a Watson Wyatt seminar said they were planning to buy out their pension liabilities with an insurer during the next 10 years. That’s up from 31% who said they were doing so last year.
The move to settling pension liabilities has been rising up the corporate agenda. Three-quarters of delegates said either that the possibility of buying out liabilities had been discussed at a board meeting (45%) or that they expected this to happen within the next 12 months (29%).
“Not long ago, the cost of removing pensions risk from the corporate balance sheet was seen as prohibitive,” says Steven Dicker, a senior consultant at Watson Wyatt. “Competition and more attractive pricing may now have brought buyout within reach of more companies.”
Watson Wyatt’s Corporate Consulting Group gauged the views of company pension sponsors at a recent seminar attended by senior representatives of companies with defined benefit pension plans.
For more about pension liability buyouts, click here to read The Ultimate Pension Solution from the February 2007 issue of Benefits Canada.
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