The sector grew by 50% last year - a trend which the industry group claimed is 'good news' for savers.
Workplace retirement saving schemes are changing hands at an increasing pace, as large firms seek to cut their exposure to risk.
The Association of British Insurers (ABI) has released new year-end figures on the "pensions buyouts", showing that the sector grew 50 percent in 2008. In total, £22 billion of defined benefit (DB) pension funds are now under the buyout firms' management.
In effect, the transfers work by the guarantees of a workplace DB scheme being switched from its original sponsor to that of an insurer - a Bulk Insured Pension Company, otherwise known as a buyout firm. These transfers work through the schemes' trustees taking out an insurance policy with the firm.
Primarily, companies transfer responsibility for the schemes in order to limit their exposure to risk. Concerns over the financial stability of pension funds have been mounting, due to the global credit crisis which has caused significant market turbulence over recent months.
Peter Vipond at the ABI commented: "While Bulk Insured Pensions currently make up only a small proportion of total pension funds, there is increasing interest in the opportunities they provide. This is good news for those with DB pensions, as there would be no change in the pension promise. The obligation to pay their DB pension promises simply moves from the corporate sponsor to an insurer."
The ABI also provided an update on the security of pension savings made in the DB schemes which have been switched in this way. The industry group confirmed that, in the event of a scheme's operator going bust, savers would be protected by the Financial Services Compensation Scheme rather than the Pension Protection Fund.
