The Great Debate UK

Why the bulk-annuity market won’t revive

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Adam Stanley- Richard Jones is principal at Punter Southall Transaction Services. The opinions expressed are his own. -

A bulk annuity buy-out is an insurance contract which allows a defined benefit pension scheme sponsor and its trustees to absolve themselves of their responsibilities in regard of the accrued liabilities to members.

During 2005 and 2006, the buy-out market saw new mono-line insurance providers challenge the more established and diversified market players such as the Prudential and Legal and General. Despite the attractiveness of certain aspects of this insurance product, the premium required makes buy-out too expensive for many pension schemes.

Successive government statutes establishing stricter regulation, more transparent accounting disclosures and substantial movements in asset markets have made defined benefit pension schemes an increasingly unwieldy and frightening animal for companies to manage on their balance sheet. Buy-out provides a means to remove this risk: reducing the likely volatility of contributions and the exposure to longevity and investment risk.

Second rate annuities can harm your income

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Bob Bullivant-Bob Bullivant is chief executive officer at Annuity Direct. The opinions expressed are his own.-

There are two distinct phases in building a pension – first comes the process of building up a pension fund – the so called accumulation phase. The next part is actually turning the money saved into an income for life – or pension, the so called decumulation phase.

The great annuity scandal

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stevehunt- Steve Hunt is Managing Director of independent annuities broker Rockingham Retirement. The opinions expressed are his own. -

The concept of an annuity has not changed in hundreds of years. In fact the first annuities sold were probably during Roman times where ‘annua’ were sold for a fixed period or for life; but today’s mortality is unprecedented in history. An annuity was never designed to be paid over 30 years, or even 20 years for that matter.

Pensioners must shop around to get best annuity

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hunt- Stephen Hunt is managing director of Rockingham Retirement. The opinions expressed are his own. -

If we keep going the way we are, disaster looms for millions of over-60’s in the United Kingdom.

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