Cartwright, the defined benefit and hybrid pension specialist, has urged all schemes to exert pressure on their advisers to develop an up-to-date financing position as quickly as possible in order to avoid missing out on the lucrative buyout market following the LDI crisis.
Cartwright director of consulting Sam Roberts says: “Following the LDI crisis of last year many schemes have found themselves in a much-improved funding position. Insurance pricing has also improved.
“Schemes who were ready, and in the know, have already been able to move forward quickly to secure members’ benefits – we are currently helping schemes transact within just one month. However, some schemes still remain in the dark and their members could be losing out.
“Following the initial fallout which had to be dealt with immediately, many schemes are now going through a period of assessment. Those that aren’t need to press and challenge their advisors for current and accurate funding positions. They may be surprised to learn they are either at or very close to buyout in which case they should be taking some firm decisions and acting immediately.
“The LDI crisis was quite the storm, but there is a very tangible silver lining which more schemes should be grabbing for the best interests of their scheme and, ultimately, to ensure the security of their members.
“2023 is going to be a record year for the bulk annuity market. What might have seemed unachievable has become an immediate reality for many schemes and we expect the number of transactions to more than double.
“Making your scheme as attractive as possible to the insurers will be crucial in getting the best (or indeed any) deal during what is going to be a busy year for the entire industry. But the starting point has to be established quickly.”
