The international pension risk transfer marketplace is experiencing remarkable growth, with more than $240 billion in transactions completed since 2007. In the United Kingdom, United States and Canada, hundreds of companies have transferred pension risk to insurers and reinsurers, with at least 35 pension funds executing transactions over $1 billion. Each of these transactions fulfills and secures the lifetime benefit promise to plan participants, while achieving significant corporate finance benefits for the plan sponsor.
Today, pension risk transfer is:
• Increasingly global;
• Employed by corporations of all sizes and industries;
• Flexible and customisable; and
• Aimed at achieving a lower-risk future.
A number of recent high-profile transactions reveal the strength of the global de-risking trend. Industry icons like General Motors, Rolls-Royce, Verizon, British Telecom, Bell Canada, Motorola Solutions, Bristol-Myers Squibb, GlaxoSmithKline, Kimberly-Clark and AkzoNobel have all completed pension risk transfer transactions. Each firm varies in resources, constraints, strategic goals and definitions of success. Accordingly, each deal was tailored with features to meet the company’s unique needs, and reflect a broad range of transaction sizes, with agreement amounts up to $27.7 billion. They all share the common objectives of securing the benefits promised to members, and achieving a lower risk future for the sponsor.
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