Consulting firm Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, has announced the launch of the Mercer Pension Risk Exchange, a solution that helps plan sponsors execute group annuity buyouts in less time and in a more competitive pricing environment.
The exchange is designed to increase liquidity and price transparency by enabling plan sponsors to continuously monitor pricing and contract terms available in the group annuity market.
The exchange also provides sponsors with greater exposure to a wider array of insurers that could potentially act as transactional counterparts for a buyout. Real-time online annuity pricing and trigger monitoring are also offered, combining a suite of buyout advisory and execution services.
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The exchange's deal readiness service aims to streamline the process by creating an industry standard for data preparation and document specification. Its dynamic monitoring tracks prices and metrics in real time to identify when conditions are optimal to execute.
Execution support offers help to sponsors and fiduciaries as they navigate the complexities of the buyout execution, from insurer due diligence and asset preparation through to contract negotiation.
"Though sponsors' appetite to transfer pension risk is high, they face some barriers to execution. Lack of clear information about the true cost of a buyout, limited transparency and the fluctuation of market rates and plan dynamics are all major challenges," Phil de Cristo, president and group executive of Mercer's investment business, said in a statement.
He added, "We wanted to empower plan sponsors to be more strategic and sophisticated in their approach and to execute buyouts at the best times and at competitive prices. The exchange offers a significant advantage to sponsors considering a buyout."
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