Pension Insurance Corporation plc (PIC), a specialist insurer of defined benefit pension funds, has announced that it has concluded a c.£40 million bulk purchase annuity with the Qantas Airways Limited (UK) Retirement Benefits Scheme – the pension scheme of Qantas Airways Limited, as part of a long-term partnership.
This marks the second buy-in completed by the Scheme with PIC, which also means that PIC now covers the pensions of every member of the Scheme.
The first buy-in for the £25 million occurred in 2018.
According to the announcement, the second deal is a full buy-in with the remaining 62 current pensioners and 168 deferred members covered.
At the same time, PIC has completed more than 75 repeat transactions with existing Trustee clients, covering £15 billion of liabilities and the pensions of more than 90,000 scheme members.
In addition, PIC received legal advice from Rachel Pinto, Pensions Partner, at Herbert Smith Freehills, while, the Trustees were advised by Aon with legal advice from Eversheds Sutherland and Reed Smith LLP in relation to benefits.
“We are delighted to have completed this second buy-in with PIC, which covers the remaining uninsured members within the Scheme. This is part of a long-term de-risking strategy led by Aon over the past five years which has allowed us to complete this transaction despite the current uncertainty in the markets. PIC was flexible in helping us achieve our aims and I want to thank them and the Scheme’s advisers for their hard work,” commented Bojan Jokovic, Chair of the Trustees.
“PIC is really pleased to have had the opportunity to work with the Trustees and Qantas Airways Limited again to
significantly de-risk this scheme, providing greater security to all their members for the longterm. This transaction emphasises how smaller schemes can access competitive insurer pricing with attractive terms if they prepare and approach the market in the right way. We have the flexibility and scale to offer solutions to well-prepared schemes of all sizes that approach the market using well-governed processes,” added Mitul Magudia, Head of Business Development at PIC.
“The two Qantas Airways buy-in transactions demonstrate the strength of Aon’s ‘Journey to Settlement’ proposition. Careful planning was carried out ahead of the 2018 buy-in, developing a clear strategic path to follow in the years ahead. Subsequent comprehensive data and benefits preparation, as well as timely investment de-risking, ensured the Trustees and Company could rapidly lock into favourable annuity pricing when the opportunity arose,” said Michael Walker in Aon’s Risk Settlement Group.
Meanwhile, PIC recently provided a company update and pension risk transfer market outlook, highlighting that as of 31 March 2023, new business premiums of £6.2 billion were recorded in comparison to FY22’s £ 4.1 billion.
