BUY-OUTS, BUY-INS, LONGEVITY SWAPS & TAX CONSIDERATIONS
A number of Defined Benefit (DB) pension schemes (schemes) that we work with are continuing on a de-risking journey leading to self-sufficiency or buy-out. This makes sense, since as investment risk reduces, managing longevity risk becomes increasingly important. There are two main types of solutions available to sponsors and trustees for reducing or removing this risk:
- Bulk annuity transactions such as buy-ins or buy-outs; or
- Longevity hedging (often call longevity swaps).
