09 March 2010
Published in: Longevity - mortality
Another company transfers pension risk
Aggregate Industries' two largest pension schemes have entered into insurance transactions to transfer risk to Pension Insurance Corporation (PIC), a provider of risk management solutions to defined-benefit pension funds.
In one transaction, a £210m insurance policy was purchased by the Aggregate Industries' pension plan to meet all future payments for pensions in payment as at 30 April 2009. In the second, a £95m insurance policy was bought by the Foster Yeoman retirement plan 2000 to insure the benefits for all members. It is expected that in due course the plan will be wound up, removing any further obligation on the company.
Ian McGown, head of pensions and benefits at Aggregate Industries, said PIC was selected ahead of several other insurers. "We are extremely pleased to have completed two complex transactions simultaneously and in such a short period," he stressed, adding, "The transactions bring further increased security to members' benefits for the long-term."
Michael Berg, partner at Lane Clark & Peacock, which acted as lead adviser to the company and the trustees of the two pension schemes on the transactions, said: "We are working with a number of pension schemes and companies to explore de-risking transactions and expect 2010 to be a very successful year for the pensions risk transfer market."