Mercer Global Pension Buyout Index

Mercer Insights

Mercer Global Pension Buyout Index

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The Mercer Global Pension Buyout Index allows you to monitor the general trend in the pricing of pension annuity transactions in the US, the UK, Ireland, Canada, the Netherlands, and Germany. Mercer uses up-to-date pricing information from each country to estimate the cost of insuring a sample plan’s current retirees as a percentage of the equivalent estimated accounting liability. The information contained in this report is not based on information specific to your circumstances and approximations have been used. Past experience is no guarantee of future pricing and experience may vary for your plan.

The chart shows estimated annuity prices from insurers as a percentage of accounting liability in each of the five countries. For example, where a line is at the 113% level, this means that Mercer expects the average price of a pension annuity transaction for current retirees to be broadly 13% higher than the equivalent accounting liabilities. The solid index line shows the average price of pension annuity transactions as a percentage of accounting liability across the five locations and draws upon information such as each country’s market size.

To produce the estimates, pension liability has been measured according to local standards in each country. As an example, the cost of insuring pension liabilities in the UK is higher than in the US (relative to accounting liabilities) because UK pension liabilities are normally indexed for inflation which increases the liability durations and because insurance companies charge an additional premium to take on inflation risk. For The Netherlands the buyout price includes an estimate of the price of indexation at the same level as included in the corresponding DB accounting liability which reflects the expected discretionary indexation.

View Country Buyout Indices

To view information on the index for each geography visit the relevant website using the links below:

View US Index >>

Sean Brennan

+1 212 345 1329

View Canada Index >>

 Hrvoje Lakota

+1 416 868 2125

View Netherlands Index >>

Aart-Jan de Jong

+31 20 431 3937

View UK Index >>

 David Ellis

+44 113 394 7591

View Ireland Index >>

Sean O’Donovan

+353 1411 8360

View Germany Index >>

Georg Vieten

+49 711 237 16218

If you require further information relating to the Mercer Global Pension Buyout Index, please email us.

Mercer is a global leader in talent, health, retirement, and investments. Mercer helps clients around the world advance the health, wealth, and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in 42 countries and the firm operates in over 140 countries. Mercer is a wholly-owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy, and human capital. With 53,700 employees worldwide and annual revenue exceeding $10 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. Follow Mercer on Twitter @MercerInsights.

This document is intended for information purposes only and should not be used as the basis for any decision-making. Mercer, its employees and group companies accept no liability for any loss or damage incurred through the use of, or reliance upon, this document or the information contained herein. The contents of this document are confidential and may be subject to copyright. Mercer retains all intellectual property rights herein.