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Pension Insurance Corporation concludes $975mn UK pension fund buy-in

30th November 2017 - Author: Staff Writer

Pension Insurance Corporation has concluded a £725 million ($975mn) full buy-in with the Trustee of the Former Registered Dock Workers Pension Fund.

The buy-in fully removes the Fund’s pension liabilities risk along with its existing insurance policies.

The Former Registered Dock Workers Pension Fund is a multi employer pension scheme covering dock workers and ex-dock workers who have worked for ports and shipping organisations across the UK.

Uzma Nazir, Head of Origination Structuring at PIC said; “PIC is very pleased to have provided the trustees with insurance to secure the pension benefits for the members of the Fund.

“The Fund was in a good position having derisked the assets over several years. We were able to accept the Fund’s assets as payment of the premium, which gave the Trustee certainty on price.

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“We were also happy to offer the Trustee flexibility where needed and a commitment to outstanding policyholder care, which is something we at PIC pride ourselves on.”

Lane Clark and Peacock (LCP) acted as lead adviser to the Trustee for the transaction while Hogan Lovells advised on legal matters, Aon Hewitt on funding and administration, and Pi Consulting acted as Fund Secretary.

Ian Forrest, Chairman of the Trustee, said; “we are delighted to have secured the benefits for all members in full with an established, UK regulated insurance company.

“The Trustee is grateful to its various advisers for preparing the Fund to achieve this full buy in and to PIC for dealing with the transaction so efficiently.”

The sponsoring employers were advised by KPMG, PIC was advised by Herbert Smith Freehills.

PIC said the transaction benefited from significant preparatory work undertaken by the Fund, putting it in a position where the Trustee could move quickly to secure attractive pricing and obtain comprehensive risk cover.

“This demonstrates the benefit of investing in work up front, which enabled even a complex transaction such as this to be carried out quickly and efficiently, said Ken Hardman, partner in LCP’s specialist derisking practice; “pricing has improved markedly due to lower longevity expectations and increased insurer competition, and the Fund was able to seize this opportunity.”

The transaction was funded entirely from the Fund’s assets without further contributions from the sponsoring employers.

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