AEGON and UBS link to offer UK pension buy-out service

AEGON UK and UBS Global Asset Management are joining forces to offer a bespoke service to help companies deal with their pension fund liabilities. The joint approach is currently being discussed by UBS with a number of clients and will be marketed more broadly in due course.

Recognising the increasing role bulk annuities will play for their clients, UBS Global Asset Management approached AEGON UK to provide this element for their integrated risk management proposition.

The bespoke service is aimed at pension funds with liabilities in excess of £300m that are looking for a tailored solution to their pension strategy – rather than a straight investment or pension buy-out proposition.

This new offering from AEGON UK and UBS Global Asset Management will be known as UBS AEGON Affordable Risk Transfer Solution. It will provide clients with an integrated solution from two highly-rated companies combining insurance, administration, asset management and risk management capabilities. Compared to traditional buy-out, it defers the buy-out of more expensive liability tranches and creates the opportunity to generate returns. This increases the probability of lower overall costs and makes risk transfer more affordable for partially funded plans.

Commenting on the new solution, AEGON UK chief executive Otto Thoresen said: “Linking with UBS Global Asset Management will enable us to provide a bespoke bulk annuity service to a different segment of the corporate market from the SME market where we have made a strong start. This is an important market with a number of diverse opportunities and we are looking forward to developing our proposition with UBS in the weeks and months ahead.”

UBS Global Asset Management’s Head of Global Investment Solutions, Brian Singer said: “We are delighted to be entering this rapidly expanding marketplace with AEGON UK. Together we can provide integrated solutions built from proven capabilities and customised to our clients’ needs. This initiative brings longevity risk management into the toolkit of the asset manager and perfectly complements our dynamically-managed investment solutions for pension plans.”