Mercer | Mercer Pension Risk Exchange – How It Works

Financial Intermediary Partnerships

Wealth and Investments

Mercer Pension Risk Exchange®

How Mercer Pension Risk Exchange works

In this short video, find out how Mercer Pension Risk Exchange brings together buyers and sellers of bulk annuities.

Mercer Pension Risk provides you with timely and relevant management information, facilitates the discovery of pricing opportunities, and helps you transact much quicker than ever before.

Insurer pricing is provided directly by the insurers onto the Exchange, and reflects current financial market conditions. Crucially, changes in the insurers’ appetite for buyouts will also be reflected, and this usually does move throughout the year. In other words, the Exchange gives you real commercial pricing from insurers, on a regular basis, based on transaction-quality disclosures.

Your plan-specific data is provided to the insurers at the outset, in a standardised format and covers the plan’s benefit structure, membership data and details about the plan’s own commercial situation.

Once this data has been uploaded to the Exchange, insurers are invited to participate in the bidding process. Assuming the plan is attractive to the insurers, they will then commit to providing a series of regular pricing proposals. This is the beginning of the monitoring phase.

During the monitoring phase, insurers provide pricing on a regular basis, generally monthly. These regular bids can then be compared directly to an extensive range of metrics such as plan assets, technical provisions and even the effect on funded status. This process continues until pricing triggers are met and you wish to advance into deal execution mode.

However, if any insurer has a particular appetite for your plan at a given time, they can make an off-cycle, exclusive proposal to you via the Exchange. This is the “shop window” concept and builds on the two-way interaction between pension plans and insurers.

The execution bidding process is also managed within the Exchange. Given that the insurers will be familiar with your plan’s member data and benefit structures by that stage, you will be able to execute a deal much quicker than ever before. As a result, the Exchange puts you in a prime position to take advantage of fleeting windows of opportunity.

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