One of the wonders of the post Covid world has been the rise of the webinar and the sharing of IP by the pension fraternity. No consultant has done more in this space than Hymans Robinson and it is greatly to their credit that not only are they thinking beyond buy-out but they are sharing their thinking, not just with their clients, but the general public.
Here is there latest thinking on how insurance and run off strategies can be considered against each other. Press this link
The webinar is , in one sense, an advert for M&G and the use of a holding in its with-profits fund as a contingent asset or in conjunction with a captive insurer.The point’s that this allows sponsors to pre-fund future risk using the Prudential’s with-profits fund and the structure allows surplus to be extracted by the sponsor with minimal hassle
I am of course contracting the complexity and probably missing the subtlety of the argument. The important thing is that solutions are starting to be discussed that allow pension schemes to remain open and run-off over time. This offers schemes an alternative to buy-out. LCP have put forward a solution that effectively puts the PPF as the insurance for members that should the sponsor covenant fail, there are assets in place to meet the member’s pensions.
If you are interested in this area of finance, or are interested in what pension schemes can do – if they are given a chance, you should tune into Edi Truell and Luke Webster talking about these things at Pension PlayPen’s coffee morning on Tuesday at 10am.