Transfer pension risk now or pay price later

Japan's benchmark bond yields fell to below 1% at the beginning of August, and with UK gilt yields and therefore annuity rates falling fast, commentators are starting to draw parallels between the two economies. Falling rates could spell bad news for UK pension schemes, in terms of the cost of liability. "For much of 2009 it may have made sense for scheme sponsors to hold off transferring pension risk whilst expectations were that rising bond yields would improve investment returns, reducing liabilities, and lower the cost of pension buyout," says David Collinson, partner at Pension Corp...