What is a pension insurance buyout?

A pension insurance buyout is:

  • A full and definitive settlement of the liabilities insured
  • A transfer of the promise to the pension fund member from the pension fund to the insurer
  • The removal of the pension fund liabilities from the pension fund and the employer’s financial reporting
  • Policyholders have a guaranteed income stream, backed by the a level of capital held by PIC, above that required by our regulators 

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In summary:

  • Corporate sponsor is divested of all responsibility for supporting the pension fund
  • Pension fund is typically wound up and the trustees discharged
  • Assets pass across to PIC, which becomes responsible for paying pensions
  • Pension fund members become PIC policyholders following transition period

Watch our video to understand some of the issues that can be addressed in preparing for a buyout