Mercer has announced its role as lead and sole actuarial advisor to Citi's Pension Solutions team in relation to the £1.5bn pension buyout of the EMI Group Pension Fund completed with Pension Insurance Corporation (PIC). Mercer’s role included advising the Citi team on structuring the insurance contract and supporting the competitive tendering process. Mercer’s team consisted of David Ellis, Andrew Ward, Adrian Hartshorn, Nigel Roth and Neil Rogers,
David Ellis, Mercer's UK bulk pensions insurance leader and lead adviser to Citi on the EMI transaction, commented,
"This is a landmark transaction, demonstrating that bulk pensions insurance transactions remain viable despite what some commentators describe as adverse conditions."
He continued "We have been working closely with the Citi team on a variety of assignments relating to this transaction for over two years. Throughout the entire process, we have combined the considerable set of skills possessed by the Citi team with a complementary range of expertise from within Mercer. Relevant and wide-ranging experience, speed of response, identification of the sponsor's and trustee's needs, and close collaboration at all times have each contributed to this transaction being a landmark success."
"A transaction of this size can be complex and requires detailed understanding and management of investment, longevity, benefit and data related issues,” said Andrew Ward, head of longevity swap consulting at Mercer. “Working with the strong Citi team, we addressed all of these risks and delivered a good outcome for the Trustee and Fund members."
Mr. Ward concluded, “The deal is the outcome of a long-standing partnership between Mercer and Citi that has involved a strong focus on managing a wide variety of financial risks and building a framework that has allowed this transaction to be completed.”
This transaction underlines Mercer's position as adviser of choice for large pension buyout transactions in the UK and US. Mercer acted as lead adviser on four of the five largest pension buyouts completed in the UK to date: EMI (£1.5bn), T&N (£1.1bn), Thorn (£1.1bn) and Rank (£0.7bn). Mercer also advised on the two largest buyout transactions in the US - General Motors ($26bn) and Verizon ($7.5bn).
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