The average time to buyout for the FTSE350 DB pension schemes has fallen to 5.1 years, attributable to continued improvements in funding, according to Barnett Waddingham’s recent analysis of the DB End Gauge index.
Barnett Waddingham principal Lewys Curteis says: “DB pension funding levels remain strong as we approach the end of the calendar year, with schemes continuing to benefit from the sustained revival in bond yields. The improvement in funding levels has led to a substantial increase in demand for bulk annuities – a trend that will undoubtedly continue as our DB End Gauge index shows the average time to buyout falling to 5.1 years.
“However, sponsoring companies should keep one eye on the development of the Government’s so-called Mansion House reforms, where the potential relaxation of rules around the refund of surplus assets could provide a strong incentive to consider alternative strategies to buyout.”
