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As the fourth quarter begins, we want to update you on pension buyout activity for 2015. The variety of recent transactions illustrates how the insurance market has expanded the range of solutions it offers to pension sponsors. New market participants and the emergence of multi-insurer structures drive today’s dynamic market, one that will continue to see future change.
Case in point: On October 1st, Royal Philips announced a group annuity buyout transaction with three insurers: The Prudential Insurance Company of America (Prudential), Banner Life Insurance Company, the primary U.S. insurance subsidiary of Legal and General America (L&G), and American United Life Insurance Company (AUL), a OneAmerica company.
Mercer acted as the lead advisor to Philips on this transaction that covers approximately 17,000 former U.S. employees and their beneficiaries and $1.2Bn of pension obligations. Prudential and L&G will be responsible for retired lives and AUL will undertake pension obligations for former employees who are not currently receiving their benefits.
This transaction is notable for several reasons:
Register for our webcast Oct. 16 where Mercer consultants and insurers will provide an overview of recent transactions and share their perspectives on how the market continues to evolve.
- First transaction of this size involving three insurers
- The largest liability settlement that includes both retired and deferred lives in recent years
- Entry of L&G to the US group annuity market
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