We have experience of Buy in contracts. For one scheme, the pensioners were all secured with a household name insurance company via a Buy in policy. The process involved cleaning the data; securing competitive quotes; matching the investment strategy and agreeing the execution of the transaction with the sponsoring employer. It reduced the pension risk to the employer. Interestingly, in this case, the market could not offer to match the capped CPI increases attaching to some benefits. Therefore, RPI increases were agreed under the policy although members continue to receive capped CPI payments. This results in a small “profit” to the scheme in most years. Buy in contracts are becoming increasingly common as schemes mature and progress to full Buy out.
