Definition of buy-ins

Similar to bulk annuity. Pension schemes purchase an insurance contract that underwrites the risks associated with paying income to retirees. But these have also been used to offload the liabilities associated with so-called deferred pensioners, usually people who have left a company but have not yet retired.

The way to make money here is to offer individuals a cash settlement today in exchange for future pension rights. Trustees offload all investment, inflation and longevity risks associated with paying income to a group of retirees. Insurer gains control over a chunk of assets and a premium. [1]

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Tackling the longevity question

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