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Aon Retirement and Investment Blog

2018 U.S. Annuity Settlement Market Update

Innovation Drives Market Growth

2017 was a year that saw U.S. pension sponsors and annuity providers continuing to work together in support of record transaction growth, with nearly $25 billion in liabilities settled through pension risk transfer (PRT) transactions. With the transaction pipeline growing each day, marketplace actors (sponsors, advisors, and insurers) should continue to work thoughtfully to maximize transaction capacity.

Insurer price estimation techniques have become increasingly important in terms of supporting initial plan sponsor decision-making. We believe direct insurer price-quoting activities should be appropriately reserved for projects where organizational approval and management support have already been obtained.

As the pace and scale of annuity settlement transaction continue to accelerate, it is important to remember that PRT transactions are complex projects that deliver significant value to the pension plan sponsor. Furthermore, participants who are no longer members of the pension plan are also affected. Pension plan fiduciaries must continue to exercise prudence and diligence in executing these transactions with robust processes that fully consider the best interests of all plan participants.

Aon is proud of its extensive record of supporting U.S. pension risk transfer activity and looks forward to another year of continued market evolution. We have prepared this Market Update to help educate pension sponsors and other pension stakeholders on pension risk transfer strategies.

For more information, please see our full white paper here.

Steve Shepherd is a Partner in our Annuity Settlement Team and is based out of Norwalk, Connecticut.

“Content prepared for U.S. subscribers, but available to interested subscribers of other regions.”

The information contained above should be regarded as general information only. That is, your personal objectives, needs or financial situation were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of acting on this information, particularly in the context of your own objectives, financial situation and needs. Nothing in this document should be treated as an authoritative statement of the law on any particular issue or specific case. Use of, or reliance upon any information in this post is at your sole discretion. It should not be construed as legal, tax or investment advice. Please consult with your independent professional for any such advice. The information contained within this blog is given as of the date indicated and does not intend to give information as of any other date. The delivery at any time shall not, under any circumstances, create any implication that there has been a change in the information since the date of publication, or any obligation to update or provide amendments after the original publication date. The blog content is intended for professional investors only.


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