14 April 2025
5 min
The Prudential Regulation Authority (PRA) have published a consultation paper which introduces the concept of the Matching Adjustment Investment Accelerator (MAIA).
Recap of Matching Adjustment
The “Matching Adjustment” (MA) is a fundamental component of pricing in the bulk annuity market. Without it, the cost of a buy-in or buy-out would be prohibitive to pension schemes. It allows insurers to discount their liabilities using the asset yield of the investments that back these liabilities, minus an allowance for credit risk known as the "fundamental spread”.
In this newsflash, our experts explore what this proposal could mean for the bulk annuity market.
If you have any questions or would like to discuss further, please get in touch.
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