The year 2024 and the first quarter of 2025 have seen continuous and significant growth in the market for bulk purchase annuities (“BPAs”)/pension risk transfers (“PRTs”) in the United Kingdom. In 2024 alone, there were £47.8 billion in bulk annuity transactions in the UK, with a record 298 transactions completed, according to market reports. This growth has been accelerated by a number of new entrants to the PRT market in the UK in the last year.

In Ireland, although the pension fund sector continues to grow at a steady rate (with total assets of the Irish pension fund sector increased by 3% in Q4 of 2024 to a total of €146 billion, according to the Central Bank of Ireland), the recent growth in PRTs in the UK has not been reflected here. Given that Irish defined benefit (“DB”) schemes appear to generally be in a strong funding position to carry out PRT transactions, this begs the question – why have Irish PRT transactions not experienced similar growth?

Market Size Comparison

A common answer to this is that the Irish market is too small. While the potential Irish PRT market is significantly smaller in scale than the UK market (comprising approximately €70 billion in DB scheme assets, as compared to approximately £1,500 billion DB scheme assets in the UK), this argument may no longer hold up given recent trends in the UK PRT market.

In the UK, last year smaller schemes under £100 million accounted for nearly 80% of transactions in the UK BPA market. Research suggests that small and medium size deals dominated the UK market last year and it is notable that these statistics have prompted life insurers to create specific solutions that are tailored towards small scheme transactions and encouraged new entrants to the UK marker to focus on small schemes in the first instance.

Opportunities for Growth in Ireland

While the scale of Ireland’s bulk annuity market does not compare to the UK market, the growth in smaller scheme transactions indicates that the Irish landscape for PRTs is fertile for new entrants. Currently, there a very small number of active participants in the Irish PRT market, as opposed to the nine entities (and counting) in the UK market. Some of the new entrants to the UK PRT market, such as Utmost Life and Pensions and Royal London, also have Irish-authorised life insurance entities, and so may be well positioned to start to compete in this space in Ireland.

Another reason why Ireland may not have seen significant growth in the PRT market in recent years is due to regulatory changes affecting the pensions sector in the EU since early 2024. The publication in September 2023 of technical advice by EIOPA on the review of the IORP II Directive and the recent implementation of DORA in January 2025 may have slowed down the development of the PRT sector in Ireland, while pension schemes adjusted to the new requirements. Given that pension schemes and trustees will have now dealt with these requirements, the PRT sector in Ireland is well positioned for growth.

Regulatory Changes

Given continuing uncertainty around inflation and interest rates and mounting geopolitical risks, buy-ins and buy-outs are likely to be an increasingly attractive option for pension schemes looking to de-risk. The growth of smaller scheme PRT transactions in the UK may allow life insurance groups with operations in the UK and Ireland, who have experience in carrying out smaller scheme transactions in the UK, to transition into the Irish market. PRT transactions may therefore be an increasingly attractive option for both Irish pension schemes and life insurers in 2025 and beyond.