On the go: The £4.2bn British American Tobacco UK Pension Fund has signed an additional buy-in deal with Pension Insurance Corporation, insuring approximately £400m of pensioner liabilities.
This transaction followed an initial buy-in covering £3.4bn of liabilities in May 2019, taking total pension liabilities insured from the fund by PIC to £3.8bn.
The fund has total liabilities of £4.1bn with more than 10,000 members. Seventy-five per cent of the liabilities insured in this latest transaction relate to non-pensioners.
Graeme Munro, chair of the British American Tobacco UK Pension Fund, said: “We are pleased to have secured this second insurance agreement with PIC, which guarantees the pension payments for many more of our members.
“Increasing the security of members’ benefits and reducing risk are top of the trustee’s agenda, and this latest transaction is another step towards achieving our aims.”
LCP advised the trustee and acted as lead transaction adviser. The pension fund received legal advice from Linklaters, while Hymans Robertson is the scheme actuary. Mercer and Travers Smith acted as advisers to British American Tobacco.
Yadu Dashora, partner at LCP, said: “The BAT Fund exemplifies the trend amongst pension schemes of establishing a strong foundation through an initial transaction that can be scaled up when attractive to secure further benefits, providing valuable optionality for the scheme without obligation.”
This article originally appeared on MandateWire.com
