Prior to 2004, weak regulation and less stringent accounting standards enabled companies to underestimate the true cost and risk of their defined benefit (DB) pension schemes.
We now live in a world where pension schemes are under considerable pressure - the result of increasing longevity, unprecedented market conditions and a tough regulatory and accounting environment.
As a result, more and more DB schemes are closing to new members and future accrual, with companies increasingly looking to the end-game. And because security of benefits is essential to schemes and their members, this is expected to result in an increasing move to insurance buyout.
Nevertheless, despite a market of over £1 trillion of liabilities, to date the buyout market has seen relatively low levels of activity, with less than £30 billion of DB liabilities insured since 2006. The major stumbling block has been affordability.
Long Acre Life was created to change this.
Despite a market of over £1 trillion of liabilities, the buyout market has seen less than £30 billion of DB liabilities insured since 2006.