The pension and benefits consulting firm Mercer has created an online marketplace for bulk annuities.

The company launched its Mercer Pension Risk Exchange at the start of the month. The online marketplace is the first of its kind for Canada, and it is meant to bring together group pension plan sponsors who want to lower their risk and insurers who sell group annuities.

Despite persistently low interest rates, the consulting firm says it has observed a sharp uptick in buyout activity over the last couple of years. "The number and dollar volume of deals of all sizes is increasing, not just the headline grabbing jumbo buyouts," says Mercer. "Many plan sponsors continue to wait for interest rates to rise before considering a pension buyout. The challenge for these sponsors will be knowing when to act, and being able to move fast when attractive annuity pricing is available."

Mercer believes its exchange will streamline the buyout process, and suggests that pension plan sponsors that use its online marketplace to view real-time metrics and insurer pricing will have a better understanding of the costs involved long before they sign a deal. As a result, they will be able to move quickly when attractive annuity pricing is available. While traditional buyout decisions can take up to six months, Mercer says its exchange can help reduce this time period to as little as two weeks.

“This new technology platform is the only solution that provides real-time and simultaneous annuity pricing monitoring in Canada, the US, and the UK. This will help clients understand market pricing and, importantly, the best time to execute a transaction,” says Jacques Goulet, president of Mercer's Retirement, Health, and Benefits business globally. “Timing can often be the most significant factor in realizing the best value.”