UK bulk annuity company pension deals totalled 2.7 billion pounds ($3.53 billion) in the first half of 2016, down 39 percent from a year earlier, consultants Aon Hewitt said on Tuesday.
Pricing of the deals, which involve insurers taking on the risk of company defined benefit, or final salary, pension schemes, is “at most competitive levels seen in recent times relative to gilts-based funding targets”, Aon Hewitt said in a statement.
Deal volume was likely to accelerate in the second half, Aon Hewitt added, pointing to deals completed by insurers Legal & General and Pension Insurance Corp in July and August.
Falling UK interest rates have widened UK company pension deficits, providing more incentive for companies to offload the risk of managing their pension schemes. ($1 = 0.7646 pounds) (Reporting by Carolyn Cohn; editing by Simon Jessop)