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.
To receive all of our future pensions podcasts subscribe to our UK pensions blog.