For trustees and sponsoring employers of Defined Benefit schemes, the growing burden of regulatory compliance adds additional layers of risk and cost to running a pension scheme.
Many see buy-ins and buy-outs as an attractive solution. With both buy-ins and buy-outs, trustees and sponsors are able to transfer risk from the scheme to a specialist insurer.
Where trustees choose a buy-in, they retain the liability for providing member benefits. With a buy-out, on the other hand, they pass that responsibility across to the insurer, lifting away the combined burdens of risk and scheme governance.