Due to the recent increased funding levels, some sponsor's may feel reluctant to pass all the potential profit over to an insurer and lose out on any future upside. They may instead be considering run-on so they can continue making a profit.
With this in mind, we’ve built an innovative, first-of-its-kind Bulk Purchase Annuity proposition that allows a sponsor to secure their members benefits in the same way as a regular buy-in, but still participate in that upside in the longer term.
Currently in the market there are several alternative solutions that allow the sponsor to still participate in upside e.g. capital backed journey plans or superfunds, but they don’t allow the sponsor to secure their members benefits in the same way as a buy-out does.
How it works?
The Trustee enters into a standard buy-in policy with Prudential Assurance Company (PAC), scheme members then benefit from a fully insured solution.
Prudential Assurance Company (PAC) is the life assurance arm of M&G plc, and M&G Investments will manage the assets backing Best Estimate Liabilities (BEL) and the collateral assets within the Captive Reinsurer.
The Captive reinsurer creates a bankruptcy remote and project-specific insruance cell that underwrites the risk to Prudential Assurance Company that BEL assets are insufficient to meet expected benefit payments.
The Sponsor makes a small upfront investment and expects to receive most of the reinsurance premium as profit over time.
We have the experience and expertise to guide you through our Bulk Purchase Annuity solutions, from initial conversations to delivery and ongoing support. We are committed to delivering a commercially-focused outcome and meeting the desired solution for your scheme. Please contact a member of our team if you would like to discuss any of our solutions.
M&G plc, incorporated and registered in England and Wales. Registered office: 10 Fenchurch Avenue, London EC3M 5AG. Registered number 11444019. M&G plc is a holding company, some of whose subsidiaries are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority.
M&G plc is a company incorporated and with its principal place of business in England, and its affiliated companies constitute a leading savings and investments business. M&G plc is the direct parent company of The Prudential Assurance Company Limited. The Prudential Assurance Company Limited is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.