According to recent research conducted among finance directors (FDs) and trustees in Ireland, there is a growing awareness of the importance of managing pension scheme liabilities in defined benefit schemes. Three quarters (76%) of respondents state that de-risking their company pension scheme is ‘important’ to their overall business objectives, including 38% who state that it is very important.
MetLife Assurance Limited (‘MetLife Assurance’), a leading UK bulk annuity provider announced today that it will offer bulk annuity solutions in Ireland for pension scheme liabilities in excess of €2 million.
MetLife Assurance believes that the Irish buy-in and buyout market, although still in the early growth stages, will likely see an increasing number of solvent employers start to wind up their pension schemes following recent volatile financial conditions.
Dan DeKeizer, Chief Executive Officer, MetLife Assurance Limited, comments, “Despite continued uncertainty regarding the global economic recovery, pension liabilities are being seen as key financial components to businesses and their success.
Encouragingly, it is generally recognised that the responsibility for driving pension scheme de-risking strategy is held jointly between employers and trustees and that a range of activities are being actively considered”.
Research shows a third (34%) of all Irish respondents are most likely to consider asset allocation such as liability driven investment and asset diversification for achieving their de-risking goals. The next most popular action for the combined respondents is risk mitigation (16%) e.g. longevity insurance, closely followed by liability reduction such as enhanced transfers and trivial commutations (15%). Eighteen percent of respondents expect to be involved in a pension scheme buy-in over the next two years, with 10% likely to undertake a buyout within the same timeframe.
In addition, MetLife Assurance expects the popularity of bulk annuities in Ireland to increase as multi-national companies investigate global pension risk transfer solutions to cover all, or part of, their accrued pension scheme liabilities as part of a general de-risking strategy.
DeKeizer continues, “Our research shows an increased demand among both pension scheme trustees and company executives in Ireland for de-risking solutions such as buyouts and buy-ins. We have a compelling proposition to offer Irish companies and scheme trustees looking to better manage their liability issues and wanting a safe home for their pension schemes. We are a well-capitalised insurer with a thorough understanding of longevity and investment risks, underpinned by the considerable resources and heritage of our parent company.
