Insurers and consultants had been confident that buyouts of pension funds would rise in the succeeding years. Industry sources had said improved funding ratios and expectations over rising interest rates would have pension funds sell its liabilities for cheap to insurers.
Annuity provider executives in Metropolitan Life Insurance Co and Prudential Financial Inc, for example, projected an aggregate USD2 billion to USD5 billion pension fund buyouts by the end of this year. About USD1 billion in buyout activity had been seen in the industry year to date, and that experts deduced that historically, investors wrap up decisions on pension buyouts by the last quarter.
Prudential Financial Inc US distribution and client management for pension risk transfer Glenn O'Brien said, "We think $150 billion in five years could get done."
Mercer LLC's U.S. financial strategy group partner and leader Richard McEvoy added, "The market won't rebound to $37 billion this year. The market hasn't taken off, and (current) interest rates have a lot to do with this, but sponsors take a while to get their act together. They're talking about it."
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