Pension Insurance Corporation has concluded a pension insurance buy-in with the Trustee of the Total UK Pension Plan. The transaction covers £1.6 billion of pensioner liabilities. The Plan has total liabilities of £2.6 billion. The Trustee and company were advised by LCP, with Mayer Brown acting for the Trustee. PIC was advised by CMS.
Total is the world’s fifth-ranked publicly-traded international oil company, with almost 99,000 employees in over 130 countries.
Iain McCombie, Chairman of Trustees, 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.”
Emma Watkins, Partner at LCP, and lead adviser of the transaction said: “This is the second largest buy-in completed in the UK to date. 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.”
David Collinson, co-head of business origination at Pension Insurance Corporation, said: “We are delighted to have been able to help the Trustees achieve their aims of removing risk from the Plan. This is a landmark transaction for PIC and is significant for the bulk annuity sector, pushing pension liabilities insured already this year past £5 billion.”
Clive Wellsteed, Partner at LCP, and Head of the Buy-out Practice commented: “This deal forms part of a growing trend of FTSE100 and blue-chip companies looking to de-risk their staff pension schemes, since the recently announced ICI Pension Fund buy-in (£3.6bn) demonstrated bulk annuity contracts can be successfully structured at a scale not previously seen.”
Wellsteed continued: “We expect to see an increasing trend of £1bn-plus transactions of this nature, with 2014 having the potential to see over £10 billion in bulk annuity business which would be the largest yearly total yet. We are delighted that LCP has developed a reputation as the market leader in this specialised field.”
|
