WTW Germany has launched a new Pensioners' Association, which will enable companies to fully and legally secure outsourcing of pension obligations, offering both capital investment concepts and a reinsurance solution in cooperation with Munich Re. 

The company said that the high level of funding in the German defined benefit (DB) pension market makes conditions "particularly favorable for a buyout at this time". 

Indeed, WTW's latest German Pension Finance Watch revealed that the funding level of DAX companies is around 87.1 per cent, attributing recent improvements to the higher discount rate and stable capital markets. 

According to WTW head of retirement, Hanne Borst, interest in the WTW solution is "high", and the group is already in contact with several potential customers.

"Many companies are looking for ways to reduce complexity and administrative effort and outsource risks," Borst explained. 

"With the establishment of the WTW Pensions Company, we are creating an independent solution for companies: WTW Pensions Holding GmbH acts as an independent risk carrier for the outsourced pension obligations." 

The group has also established a legally recognized German foundation to act as the shareholder of the pension company, which Borst said will help create a "sustainable framework for the long-term stability and security of pension benefits".

The platform offers an investment concept, which is intended to be closely aligned with the needs of companies and offers access to WTW Investment's global investment expertise in the development and management of pension assets. 

As an alternative to the investment concept, WTW is also offering its clients a reinsurance solution from Munich Re, providing a full risk transfer based on market interest rates, which is more economically attractive than previously available insurance solutions.

Within the framework of the pensioner company, this insurance-based financing option involves Munich Re assuming the risks associated with pension obligations.

---