The Total UK Pension Plan has entered into one of the largest buy-in deals so far seen in the UK, covering £1.6bn of pensioner liabilities.
The transaction between the oil giant and Pension Insurance Corporation, is the second largest buy-in completed in the UK to date following the ICI Pension Fund’s announcement in March that it had £3.6bn of liabilities through a buy-in across two separate transactions with Legal & General and Prudential.
Total has 99,000 employees in over 130 countries. The pension plan has liabilities of £2.6bn.
Trustee chairman Iain McCombie said: “This was a complex transaction in which we sought to bring certainty to a large portion of our liabilities. Working closely with our advisers at LCP and Mayer Brown and the team at PIC, we are delighted to have been able to conclude this transaction on favourable terms and within a tight timetable. PIC has been both flexible and proactive in helping us achieve our goals.”
The trustee and company were advised by LCP, with Mayer Brown acting for the trustee. PIC was advised by CMS.
Pension Insurance Corporation co-head of business origination David Collinson added: “This is a landmark transaction for PIC and is significant for the bulk annuity sector, pushing pension liabilities insured already this year past £5bn.”
LCP partner Emma Watkins, lead adviser of the transaction, said: “The size of the transaction has required the implementation of an innovative structure that has been successfully achieved with the cooperation of PIC. We expect to see an increasing trend of £1bn plus transactions of this nature.”
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