The EMI Group Pension Fund has completed the biggest buyout deal seen in the UK to date, covering £1.5bn of liabilities and 20,000 members.
The scheme trustees said the deal, which was carried out with Pension Insurance Corporation and Citi, would enable them to insure all liabilities of the fund, providing certainty to members and the sponsoring employer.
Trustee company chairman Clive Gilchrist of BESTrustees added: “I have written to the fund members telling them that their benefits have been secured in full with PIC; as a trustee, fully securing benefits is the ultimate goal. An enormous amount of time and effort has been put into this by all concerned. The outcome demonstrates how worthwhile it has been.”
David Collinson, co-head of business origination at Pension Insurance Corporation, said: “We are proud to have completed this transaction, the largest ever pension insurance buyout. We worked closely with all parties to help them move rapidly through the process and to give them price certainty through an “all risks” structure.”
Citi Pension Solutions team manager Swapnil Katkar continued: “We ran a disciplined process that allowed the trustee and sponsor to achieve their objectives of acquiring all risk cover on competitive terms from a leading provider. Working closely with the trustee board, sponsor representatives, insurers, legal counsel and actuarial advisors allowed us to conclude the policy acquisition within five months, ahead of plan, despite the low interest rate environment and volatile market conditions.”
David Ellis, Mercer’s UK bulk pensions insurance leader and lead adviser to Citi on the transaction, added: “This is a landmark transaction, demonstrating that bulk pensions insurance transactions remain viable despite what some commentators describe as adverse conditions.”
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