Pension Insurance Corporation (“PIC”) has concluded a pension insurance buy-in with the Trustees of the Institute of Cancer Research Pension Scheme. The transaction covers £30 million of liabilities. The Trustees and The Institute of Cancer Research were advised by Punter Southall and Towers Watson.
The Institute of Cancer Research, London, is one of the world’s most influential cancer research institutes with an outstanding record of achievement dating back more than 100 years. Today, The Institute of Cancer Research (ICR) leads the world at isolating cancer-related genes and discovering new targeted drugs for personalised cancer treatment. As a college of the University of London, it also provides education of international distinction.
John Roberts, Chair of the Board of Trustees for the ICR Pension Scheme, said: “Like many organisations, we were facing potentially significant financial liabilities from our pension scheme as our retiring staff lived longer and drew their pensions over a longer period. We’re therefore very pleased to have insured ourselves against those financial risks, and to have controlled the costs of doing so by taking advantage of the high value of gilts. The PIC team were flexible and proactive in helping us arrange this transaction, which puts us on a firm financial footing for the future and allows us to focus on what matters most to us – our world-leading cancer research.”
Matt Barnes, Senior Actuary at Pension Insurance Corporation, said: “We are proud to have been able to help the ICR conclude this transaction, which they viewed purely as an investment decision; trading gilts for a bulk annuity policy. Given the current value of gilts, a buy-in will typically not result in a significant additional contribution cost for the sponsor. A large number of schemes are currently looking at the gilts-for-annuities trade.”
James Staveley-Wadham, senior consultant at Towers Watson, said: “We have been working with the ICR for a number of years, and are pleased to have been able to help in addressing their pension scheme risk. An unusual feature of this deal was that all parties agreed in principle and chose their preferred provider, but the funding strain was too big. Hence a monitoring mechanism was put in place, and when markets moved such that the price was acceptable to ICRPS and ICR the deal was done. None of this would have been possible without the teamwork between the ICR, the ICRPS Trustees, their advisers and PIC.
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