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Mercer Pension Risk Exchange Infographic

A Ground Breaking Approach to Pension Risk Management

 

The annuity purchase marketplace is currently restricted by a long process, lack of price transparency, and potential for missed opportunities.  

Rooted in Mercer’s more than 20 years of experience in meeting the risk management needs of clients, the Mercer Pension Risk Exchange™ is a groundbreaking new web-based solution that helps pension plan sponsors take advantage of annuity purchase opportunities as they are presented and to execute at more competitive prices in a shorter time frame than is currently possible.

Market Forces: Driving Demand for Annuity Purchases

Low interest rates, but expected to rise.

Equity market volatility.

Uncertainty around future mortality.

Funded status fluctuations.

Mercer Canada Pension Buyout Index 2009-2016

The Index tracks the relationship between the estimated cost of settling non-indexed pensioner obligations through purchase of annuities and the accounting liability shown in corporate financial statements for a hypothetical defined benefit plan.

 

Current Pension Buyout Challenges

 

 

UNPREDICTABLE MARKET

Each deal is unique and attracts different insurers. Many deals attract a large price spread.

 

 

VOLATILITY

Pricing fluctuates regularly but is not visible to plan sponsors.

 

 

DISCONNECT

Intermediation lacking between sponsors and insurers to define needs and share data.

   

 

PRICING OBSCURITY

Plan sponsors often don’t know the price at which they should execute an annuity purchase. Obtaining a price can be difficult and time consuming.

 

WHAT IS MERCER PENSION RISK EXCHANGE™?

 

New solution that supports pension plan sponsors throughout the complex annuity purchase process.

Helps plan sponsors be better prepared and become more educated buyers.

Provides a global perspective for multinational plan sponsors, providing annuity pricing in Canada, the US, and the UK simultaneously and in real time.
Improves decision-making by allowing sponsors to identify market opportunities and to transact quickly when they arise.

Helps sponsors identify market opportunities and to transact at more competitive prices.

 

WHAT IS MERCER PENSION RISK EXCHANGE™ FOR?

 

Buy-out annuities as part of a de-risking strategy

 

Buy-out annuities as part of a plan termination

 

Buy-in annuities

 

HOW DOES MERCER PENSION RISK EXCHANGE™ WORK?

 

 

READINESS

We help our plan sponsors determine client-specific metrics that should be monitored, and establish customized triggers upon which to act.

 

 

TRANSPARENCY

The illustrative quotes provided on the platform are based on actual plan data, demographics, and provisions.

 

MONITORING

Our pricing platform enables sponsors to continuously monitor their unique annuity purchase price according to client-specific plan metrics and to execute when market conditions are optimal.

 

 

EXECUTION

By front-loading the majority of the work, insurance companies will be able to submit binding pricing very quickly whenever an attractive market opportunity presents itself.

Mercer Pension Risk Exchange™: A Better Alternative

 

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