Liability driven instruments (LDI) will be the most popular pension de-risking solution over the next five years for defined benefit schemes, EDM has claimed.
In a report on popular pension de-risking strategies, published today, the management company said that, of the 63 pension professionals who responded to its poll, over half (54%) said LDI's would be a 'very' or 'quite' popular plan between now and 2018.
By contrast, 30.9% said they favoured annuity buy-ins while the remaining respondents said longevity swaps, buy-outs and deferred premium pension annuity de-risking (28.4%; 28.4% and 18.5% respectively) would be preferred.
Mark Jones, group chief finance officer at EDM, said: 'The growing desire for DB schemes to de-risk is a huge opportunity for us.'
He said, it would help organisations digitise their information so it is more manageable and easy to use, and also provide best-practice solutions on how to capture it
It found that around 45% believe that DB schemes are going to invest a lot of time and money over the next five years to improve the quality of the data, the information they collect and how they manage their information.
As such, over half believe that more DB schemes will outsource the collection and management of information to third parties over the next five to ten years.
EDM also warned that because the quality of data and information management around DB schemes was poor, many final salary pensions may find it difficult to de-risk because they cannot present a clear enough picture of their risk profile.