Pension buyouts see huge rise in wake of Emap deal

A dramatic increase in the value of pension buyouts took place in the wake of the much-publicised Emap deal at the end of last year, it has emerged.

Pension specialist Aon Consulting released results showing that the total volume of buyouts in the last quarter of 2007 was double that of the previous three quarters combined.

More than £1.8m of pension scheme assets were transferred – along with the liability for all future payments – to specialist firms in the three months to 31 December 2007.

Publishing giant Emap led the way in November by paying £40m into its pension pot as the price of ‘selling’ its pension liabilities to insurer Paternoster.

A glut of buyouts was then predicted, but experts warned that the latest figures are clouded by a few large deals.

Paul Belok, principal and actuary at Aon, said: “The fourth quarter of 2007 was, on the face of it, a very successful one, with more than twice as much business written than in the previous three quarters put together.

“Scratch beneath the surface, however, and the story is less dramatic – a small handful of high-value schemes were the cause of this exceptional growth.”

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