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Pension Risk Transfer Growth Fuels UK Insurance Rating

Higher interest rates have boosted the funded statuses of U.K. pension schemes and given Fitch Ratings reason for optimism.
By Matt Toledo



The growing popularity of pension risk transfer deals is behind an “improving” label for the U.K.’s life insurance sector, according to Fitch Ratings. Higher interest rates have led to an increase in the funded status of U.K. pension funds, which in turn has led to an increase in PRT transactions as companies seek to offload their pension liabilities.

The increase in PRT transactions is primarily responsible for Fitch’s optimism about the sector in the U.K.; the ratings agency identified a “neutral” outlook for 2024 for the life insurance sector throughout Europe.

Fitch also upgraded its outlook for the U.S. life insurance sector to “improving” from “neutral,” as insurers will benefit from higher interest rates, according to a separate report from the ratings agency.

Fitch noted that positives for the life insurance sector in Europe, like high investment returns, are offset by negative factors, such as lower household disposable income and slow economic growth, leading to the overall neutral outlook. European markets listed as neutral include France, Germany, Italy, the Netherlands and Spain.

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With 2022 data collected, the U.K. life insurance sector saw 28 billion pounds ($35.52 billion) in pension buy-ins and buyout market value, according to Fitch. Fitch forecasted 48 billion pounds in 2023, increasing to 65 billion pounds in 2024. PRT transaction volume in the sector peaked at 44 billion pounds in 2019, while there was less than 10 billion pounds in transactions per year between 2009 and 2013.

According to the U.K.’s Pension Protection Fund PPF 7800 index, which tracks the funded status for 5,050 pension schemes, the funded status of these schemes stood at 145.7% at the end of November 2023, up from 133.7% one year earlier.

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Home > News > Regulation > PBGC Requests Nominations for Open Advisory Council Position
Regulation

PBGC Requests Nominations for Open Advisory Council Position

The deadline for nominations is February 16.
By Paul Mulholland



The Pension Benefit Guaranty Corporation has called for nominations and supporting letters to fill a vacancy on the PBGC Advisory Committee that will open on February 19. The position represents the interests of the general public.

The PBGC Advisory Committee advises the PBGC on matters of investment policy and other matters related to the PBGC’s mission, as requested. The committee meets six times per year and is composed of seven members appointed by the president, who each serve a three-year term. The Secretaries of Labor, Treasury and Commerce deliver recommendations to the President based on the nominations. Two members represent the interests of labor, two sponsoring employers and three the general public.

The PBGC says nominees should have experience in pension administration or advice or a related field.

No more than four members can be members of the same political party, and lobbyists are not eligible. The PBGC will contact nominees for information on their affiliation and status as a lobbyist. The PBGC will not accept self-nominations without supporting letters.

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Nominations and supporting letters can be sent in the form of letter to the PBGC and signed by the person making the nomination. The letter should include: the nominee’s qualifications, an affirmation that they would accept the position if offered, the nominee’s full name and contact information and the nominee’s work affiliation. It must also include the nominator’s name, contact information and signature.

The time commitment for members is typically about 15 days per year, according to the PBGC.

The deadline to send nominations or supporting letters is February 16.

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