The Jardine Lloyd Thompson (JLT) UK Group Pension Scheme has insured a further £85m of its scheme liabilities through a buy-in with Prudential.
The deal follows a previous buy-in transaction for £120m of pensioner liabilities concluded with the insurer in October 2013.
JLT said the structure of the latest buy-in had enabled the company and trustees to secure liabilities at a very competitive price. Trigger prices were set for tranches of the scheme’s liabilities and Prudential acquired assets to meet these triggers and complete the transaction.
It added these buy-in contracts were expected to reduce the volatility of the scheme’s future funding requirements.
The defined benefit (DB) section of the JLT UK Group Pension scheme has around 4000 members and assets of around £500m. The scheme was closed to future accrual in 2006.
JLT Employee Benefits head of buyouts Martyn Phillips said: “The trigger price mechanism has enabled us to achieve demanding price targets for the JLT UK Group Pension Scheme for this £85m pensioner buy-in contract, and for the £120m pensioner buy-in concluded for the scheme in October 2013. These transactions demonstrate the benefits of proactively engaging in a well-designed de-risking process and with an insurer of Prudential’s expertise to significantly reduce risk in the scheme.”
Prudential UK and Europe chief financial officer Aki Hussain added: “Prudential is leading the way in scheme de-risking with an innovative approach to segmenting liabilities. We anticipated that the introduction of this fresh, segmented approach to de-risking would prove attractive and create new opportunities for schemes to transact, and we have not been disappointed with the response from trustees. We fully expect the momentum created to carry on through 2014.”
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