UK – More competition in the UK pension buy-out market is inevitable, says the Pensions Regulator.

There was an “inevitability that this will happen” said a spokeswoman at the regulator - although she said the regulator hadn’t yet received any applications from new market entrants. She added it wasn’t the regulator’s role to “endorse or discourage” firms.

The Financial Times reported today that several entrepreneurs are lining up to compete to buy out the assets and liabilities of mature pension schemes – a market it said is controlled by life insurance giants Prudential and Legal & General.

The way buy-outs take place determines which regulator has oversight. If bought out entirely by a life insurer then the Financial Services Authority has oversight, the spokeswoman explained.

But if the pension fund were partially sold off in trustee terms, then the Pension Regulator would be responsible.

Names mentioned by the FT include outgoing Prudential life assurance head Mark Wood and entrepreneur Hugh Osmond. The issue was highlighted by the shifting of Marconi’s pension liabilities onto a rump company called Telent.

The FSA declined to disclose whether it had been approached but added that there was a possible “grey area” about who would regulate the matter. “Who would be the trustee?” a spokesman said.

Meanwhile, Prudential said today it aims to “take advantage of the global 'retirement financing' opportunity and our strong life insurance and fund management businesses”.

And its M&G asset management arm had record gross fund inflows of £5.6bn (€8.2bn), up 62%.

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