Case Study: Buyout Comparison Service

Like many other sponsoring employers, ProQuest looked forward to a time when it could fully buyout its legacy defined benefit pension liabilities, freeing up its time and resources to focus on current employees and business opportunities. Through an awareness of current buyout pricing opportunities, improved funding and use of JLT’s revolutionary Buyout Comparison Service, ProQuest was able to fully secure members’ benefits quickly and at competitive market rates. Our Buyout Comparison Service helped ProQuest and the Bell & Howell Limited 1971 Pension & Death Benefits Plan go from indicative price discovery, through to a transaction, all within 6 months.

KEY FEATURES

Quotations obtainedQuotations obtained from multiple insurers using JLT’s Buyout Comparison Service

Buyout affordabilityBuyout affordability quickly established through initial scheme specific quotations

£70m buyout transaction£70m buyout transaction completed within 2 months of requesting full binding quotations

PIC the successful insurerPIC the successful insurer

WHAT WAS THE CHALLENGE?

With an awareness of current insurer pricing levels from JLT’s significant market experience, ProQuest were keen to take an initial but speculative step into the market to establish the affordability of a buyout.

JLT were tasked in engaging with insurers to obtain a fairly accurate indication of the buyout cost through scheme specific quotations - a challenge with insurers’ resources stretched to their limits due to unparalleled demand from schemes and their advisors.

THE JLT SOLUTION

Loading scheme data onto our revolutionary Buyout Comparison Service, JLT obtained scheme specific indicative quotations from a number of insurers within a few weeks. The results were striking; rapidly establishing that the buyout price was not only significantly lower than anticipated, but less than the assets held by the Plan.

WHAT WAS THE OUTCOME?

  • The Trustees moved quickly to secure fully transactable terms from insurers, taking full advantage of the competitive quotations received, and completed a buyout transaction within two months of requesting binding quotations.
  • The whole exercise was completed just 6 months after the Trustees’ initial speculative approach, fully utilising the benefits of JLT’s Buyout Comparison Service.
  • The wind-up of the Plan is expected to be fully completed in the summer of 2019.

WHAT THE CLIENT SAID

We are delighted to have completed a buyout transaction with PIC, securing full liabilities for all members. Using JLT’s innovative Buyout Comparison Service we were able to efficiently establish the cost of buying out benefits with an insurer, which then allowed the Trustees to take advantage of the current highly competitive pricing available from insurers. We feel that the Buyout Comparison Service gave us an edge in engaging insurers in what we understand is the busiest bulk annuity market in a decade.

CONTACT

David Barratt
Senior Consultant
email: david_barratt@jltgroup.com
tel: 01727 775 421

Harry Harper FIA
Director and Head of Buy-ins & Buyouts
email: harry_harper@jltgroup.com
tel: 0161 242 5312