Listen to our latest podcast (11 mins) in which Ben Seth, Senior Associate, Pensions, Herbert Smith Freehills, and Rosie Fantom, Bulk Annuity Consultant, Barnett Waddingham:
• explain what a "residual risks" buy-out (also known as an "all risks" buy-out) is
• consider the circumstances in which trustees and sponsors may want to consider a residual risks buy-out, and
• outline the additional steps that schemes need to take to prepare for a residual risks buy-out.
Compared to a standard buy-in or buyout transaction, in which the only liabilities insured are the benefits that trustees or sponsors have specified in their benefit specification, a residual risks transaction goes further, insuring against additional risks such as trustees insuring incorrect benefits or the risk of beneficiaries being erroneously left out of the data.
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Related podcasts
Pensions de-risking Ep2: Buy-outs and GMP equalisation
Pensions de-risking Ep1: DB consolidation - Can trustees say 'yes'?
Pensions policy Ep1: In conversation with Steve Webb (Part 1)
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The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.