UNPREDICTABLE MARKETEach deal is unique and attracts different insurers. Deal pricing can vary dramatically.
A Ground Breaking Approach to Pension Risk Management
Many defined benefit plans are now closed to new employees, but these plans still represent significant obligations for the company to manage alongside its on-going business. In addition to the company specific situation, economic factors are also driving up the demand for annuity transactions; however, the annuity marketplace can be hampered by long execution timelines and lack of price transparency. A plan sponsor requires robust information on the financial position of the company’s pension plan, needs an understanding for how key financial metrics are developing over time, and values customized pricing information. This information must be accurate, up-to-date, and easily accessible.
Mercer Pension Risk Exchange TM Supports You Through Each Step of the Annuity Placement Process
There are four components of the process. We work with clients to understand the services that are most applicable to their current situation, and timeline to execute a transaction. Our approach provides increasing financial certainty as a client moves through the purchase process.
Explore: Understand market appetite and competitiveness; Assess trends over time; Determine timing/strategy to proceed with a transaction
Discover: Prepare insurer RFP and plan data; Gather preliminary annuity quotes from insurers; Establish financial metrics to monitor; Start fiduciary education
Monitor: Monitor annuity pricing against financial metrics; Complete fiduciary education; and insurer due diligence
Execute: Hold final placement auction; Select insurer and transfer premium; Commence post deal transition
Mercer Pension Risk Exchange reduces the time to transact by bringing forward: 1) data preparation; 2) agreement of optimal financial targets; and 3) approvals and sign-off.
MERCER PENSION RISK EXCHANGE APPROACH
Price updates received, financial metrics updated
Pricing Opportunity Missed by Traditional Approach