Swiss Re Insurance-Linked Fund Management

Xactanalysis Insights and PCS

Prudential completes the first pension buy-in transaction in the U.S.


The market for pension scheme hedging, de-risking and pension risk transfer has taken another step forward as Prudential announced the completion of the first pension buy-in transaction in the United States. To date the pension risk transfer market has been more prevalent in Europe.

Prudential’s Portfolio protected Buy-in product was used to transfer $75m of North Carolina manufacturing company Hickory Springs Manufacturing Company’s pension scheme investment and longevity risks to Prudential Retirement (a business unit of Prudential Financial).

The potential for this market is enormous as most owners of pension schemes and their trustees struggle to get to grips with issues such as longevity (risk of pensioners living longer than expected, interest rate risks, market risks and meet their pension obligations.

“Prudential is pleased to be the first company to bring a pension buy-in to employers in the U.S. We are also honored to be Hickory Springs’ provider of choice,” said Phil Waldeck, senior vice president and head of Prudential Retirement’s Pension & Structured Solutions business.

“Prudential’s Portfolio Protected Buy-in will help Hickory Springs reduce its pension plan risk and fulfill its fiduciary obligations,” Waldeck continued. “This transaction underscores Prudential’s ability to deliver flexible, innovative solutions that combine our core strengths in retirement, insurance and asset management.”

While not transferring these risks to the capital market, growth in the buy-in and buy-out area of pension risk transfer is likely to create further interest in other forms of longevity risk transfer and could result in the companies who take on pension liabilities needing assistance to hedge the risks they have assumed.

You can read the full press release here on the Prudential website.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis London 2022 - Insurance-linked securities conference in London

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.