UK - Danny Vassiliades, head of corporate advice at Punter Southall, has warned pension funds who are considering a buyout to de-risk their scheme should get a quote as soon as possible.

Vassiliades, who favours buyout over so-called ‘buy-in' - where the insurance policy is held as a scheme investment - also warned pension funds should look more at the price that operators offer now, instead of spending money on due diligence.

He departs from the focus of many who say understanding the strength of the organisation with whom you are doing business, and the adequacy of their risk management controls, is imperative.

Vassiliades argues players in the market now are "exactly the same in terms of financial security", despite the fact that some providers have been struggling to write new business.

Speaking at an industry conference in London yesterday, he said: "The market is not that big, only £5bn in bulk annuity business has been written this year, but there has been an increase in activity."

That said, the drop in buyout prices is not going to sustain itself as players are now building market share, and Vassiliades urges pension funds to "get those quotes in as soon as possible, because prices are going to go up now".

He also advises pension funds to invest in good quality data, as this will make the quotes of buyout providers cheaper.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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