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Pension Buyouts Predicted to Stay Level in 2009

Lane, Clark and Peacock (LCP) have revealed that 2008 was the most popular year ever for pension buyouts. The value of deals concluded in 2008 was put at £8bn. They predict that similar levels of activity will be seen for 2009, despite a slow start to the year. The current slump is expected to have an effect but only insofar as completed deals will relate to mainly pensioner-only transactions rather than schemes with active members.

On a similar note Paternoster recently published its buy out index figures for the end of 2008. The index looks at the cost of securing the liabilities of deferred and pensioner members of a typical defined benefit scheme. The net cost of buyouts increased by 13% for schemes with a high equity investment.