As 2021 draws to a close, European Pensions takes a look back at some of the biggest and most-read stories from the year


Aon and Willis Towers Watson terminate proposed merger

This was a story that was followed very closely by readers; after announcing a merger in March 2020, in July this year, Aon and Willis Towers Watson (WTW) agreed to terminate their proposed USD 30bn merger following an “impasse” with the US Department of Justice.

This ended litigation with the US Department of Justice (DOJ). As a result of the termination of the business combination agreement, Aon paid the USD 1bn termination fee to WTW. Aon CEO, Greg Case, said at the time: "Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the US Department of Justice."

Irish govt completes transposition of IORP II Directive over two years late

The IORP II Directive has had our Irish readers hooked and after a two-year delay, it was finally transposed into Irish law in April 2021.

In a statement at the time, the Department of Social Protection revealed that the Minister for Social Protection, Heather Humphreys T.D. had formally signed the European Union (Occupational Pension Schemes) Regulations 2021, which, amongst other things, amends the Pensions Act 1990 [No. 25 of 1990] to transpose requirements of Directive (EU) 2016/2341 [OJ No. L 354, 23.12.2016, p.37] (IORP II Directive) into Irish law. Since then, the Pensions Authority has published its Code of Practice on the regulations and pension scheme trustees are getting to grips with their new obligations.

Sweden’s Alecta to cut stocks and bonds over inflation fears

Fears of rising inflation, which have now materialised, have been a big theme all year, which is perhaps why this article proved to be so popular. In August, the Swedish pension company, Alecta, revealed it was cutting its holdings of stocks and bonds due to rising inflation fears.

As reported by Bloomberg, the company has increased its investments in alternative assets, such as infrastructure projects and residential housing, in order to maintain positive returns. Alecta CIO, Hans Sterte, told Bloomberg that over the longer term we may see rising inflation, which is why it is “switching the portfolio towards more real assets”. He said that in Sweden listed markets are “priced for perfection” and “everything is very expensive”.

Pacific Life Re expands into life insurance market

In April, Pacific Life Re announced it was expanding into the funded reinsurance market with the creation of a new team, Global Funded Solutions (GFS). The story proved popular with readers, in which it was revealed that the new team would look beyond the UK where there is demand for this form of reinsurance support.

Pension risk transfer markets have experienced exponential growth over the past few years, generating more demand for reinsurers to take on the full asset and longevity risk for bulk pension annuity transactions. Pacific Life Re has been a key player in the pension risk transfer market, offering longevity risk transfer solutions to insurance clients through a variety of transactions. It said that GFS was created to further support Pacific Life Re’s clients to write asset intensive business where it is required.

European DC assets expected to pass €10trn by 2030

Are the 2020s the decade of DC? According to this article the answer is yes, and many readers were interested. According to Indefi, European DC scheme pension assets are expected to pass the €10trn mark by 2030, up from €4trn at the beginning of 2020.

Its latest research found that market-linked DC products are to overtake traditional defined benefit (DB) schemes. Between 2014 and 2019, DC assets increased by 7 per cent, which has been attributed to several factors.

For example, major European markets such as the UK and the Netherlands are transitioning to a DC system away from a primarily DB landscape to join well established DC markets such as Sweden, Switzerland and Denmark. In other countries, such as France and Germany, the rise in DC is being driven by the need to shore up private pension coverage rates to complement a declining social safety net in insurance-driven countries.

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