Plans to equalise guaranteed minimum pensions (GMPs) will “significantly” increase the cost of buyouts, forcing some smaller schemes out of the market, research shows.

Paternoster has announced a £2bn longevity swap with BMW – its first deal since switching its business model from insurance to product design.

Risk transfer business levels are next year tipped to exceed those of 2008, according to respondents to PM’s buyout/buy-in survey.

DIY buy-in and longevity hedging deals accounted for nearly double the £1.5bn traditional buyout and buy-in business for the first half of 2009, according to Hymans Robertson.

Competition among longevity swap providers is forcing down prices and has attracted six FTSE 100 companies to obtain quotations.

The inaugural Buyout and Derisking Conference brought together trustees, scheme managers, finance directors, consultants and politicians to explore solutions that help defined benefit (DB) schemes make their members’ pensions more secure and reduce their impact on company balance sheets.

Buy-in deals are set to eclipse buyout deals in 2009, industry experts have predicted, though uncertainty still surrounds compensation in the event of insurer defaults.