Pension Insurance Corporation, a specialist insurer of defined benefit pension funds, has concluded a £250 million pension insurance buy-in across two schemes, sponsored by WPP.
The transaction is the second buy-in agreement between WPP and PIC, following a buy-in of £140 million of liabilities across five schemes in February 2018.
PIC won the transaction based in part on the customer service provided since the original transaction.
The transaction was led by Mercer who, with separate teams, advised both the Trustee and the Company, with legal advice provided by Sackers and Addleshaw Goddard respectively. PIC was advised by Herbert Smith Freehills.
Peter Docking of Independent Trustee Limited, the Trustee Chair for the two WPP schemes, said, “I’m pleased that we have successfully completed this buy-in, which brings further security to our pension scheme members.
“PIC provided us with a tailored risk transfer solution, and I am grateful for their flexibility and dedication in achieving this outcome. I’d also like to thank our advisers, Mercer and Sackers.”
Jay Shah, Chief Origination Officer at PIC, added, “This is the second transaction PIC has completed with pension schemes sponsored by WPP, with our outstanding customer service playing a big part in the decision to award this latest scheme to PIC.
“The specifics of this transaction show that with a creative, flexible approach from all parties, it is possible to secure a positive result with a tailored structure.
“Despite the recent severe market movements following the outbreak of Covid-19 in the UK, we continue to see a healthy pipeline of new business from trustees.
“Following our equity raise in February 2020, our solvency levels remain above those at end 2019 and our focus on PIC’s purpose of paying the pensions of our current and future policyholders puts us in a strong position to deliver for all our stakeholders in the current environment, and play an active, leading role in the pension risk transfer market.”
Chris Hawes, Principal at Mercer, commented, “We are delighted to have helped WPP over several years reach the position where virtually all their legacy UK defined benefit obligations are now insured. This is an excellent outcome for all parties.”
