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ARTICLE · 05 FEBRUARY 2025

Pension Funds: Hedging Longevity Risk

Carey Olsen
Carey Olsen
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Carey Olsen

Carey Olsen

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Hire Government Bond Yields have led to increases in the funding levels in many UK defined benefit pension schemes (DB Schemes). Now they are in surplus, many DB Schemes are considering a bulk annuity.

GuernseyFinance and Banking
Christopher Anderson
Christopher Anderson
Natasha Kapp
Natasha Kapp
Konrad Friedlaender
Konrad Friedlaender
Arya Hashemi
Arya Hashemi
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Bulk Annuities Market

Hire Government Bond Yields have led to increases in the funding levels in many UK defined benefit pension schemes (DB Schemes). Now they are in surplus, many DB Schemes are considering a bulk annuity transaction or "buy-in". As a result, the bulk annuity market is booming. According to a new forecast reported by Mary McDougall and Lee Harris in the Financial Times, UK businesses are expected to offload a record £70bn of pension obligations to insurers this year. Pension Consultants WTW also predict £20bn of longevity swaps during 2024. Guernsey has played a prominent role in this area over the last 12 years and is well placed to benefit from the current "flurry of deal making".

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