Insurance company Just Group has announced three buy-ins this week, totalling approximately £80m in premiums paid.
Catering company Dolce secured a buy-in for its defined benefit (DB) pension scheme within three months of closing to future accrual. The deal is worth £9.3m and covers all 510 members of the pension scheme.
Having closed the scheme in July, the trustees – led by MHM Trustee Services – and the employer then tasked First Actuarial with a swift move to insure the liabilities. The consultancy group received six quotes from insurers and finalised the deal with Just Group at the end of September.
David Hodgson, director of MHM Trustee Services and chair of the Dolce Limited Retirement Benefits Scheme trustee board, said: “This was a great example of how having the right people involved at the right time can lead to tremendous results.”
Chloe Davies, risk transfer consultant at First Actuarial, said: “By planning everything in advance, we were able to turn the transaction around within three months of starting the project.
“Once we’d submitted the request for quotation, we held weekly calls throughout the project. We always did as much as possible in advance to keep everything moving, which meant we transacted by the deadline that the client had in mind.”
Titanium producer completes second buy-in
Meanwhile, Just has also insured the Millennium Inorganic Chemicals (UK) Pension Scheme through a £30m buy-in.
All scheme members are now covered by buy-ins, following a previous transaction, also with Just. In total the buy-ins are worth more than £100m, according Barnett Waddingham, which advised on the deal.
Richard Gibson, head of risk transfer at Barnett Waddingham, said: “The existing buy-in policy required careful amendments, and we worked collaboratively with the trustees and Just to both secure a new buy-in and make the necessary changes to the previous policy. This process shows how schemes can act creatively to secure benefits over time in a busy market.”
Phil Howden, chair of trustees, added that the deal was “the culmination of many years of hard work by trustees past and present, which would not have been possible without the company’s support of the scheme”.
The pension scheme is sponsored by Tronox Pigment, a manufacturer of titanium dioxide and other chemicals.
Portsmouth Water scheme secures £40m buy-in
Portsmouth Water has also completed a buy-in deal with Just, it announced this week, securing liabilities relating to around 250 members of the Brockhampton Pension Scheme for approximately £40m.
The deal includes the preservation of annual increases in line with Pension Increase (Review) Orders, or PIROs. LCP, which advised on the deal, said these were typical of pensions provided by utility companies and currently mean benefits are increased in line with the consumer prices index.
By insuring the PIROs, Just has committed to linking increases to whatever measure the government chooses to use for PIROs.
David Stewart, partner at LCP, said: “At a time when recent discussion by commentators has been around simplifying benefits in pension schemes to make them more attractive to insurers, it is great to see that non-standard benefits can still be insured, even for smaller transactions. This gave the trustees the peace of mind that they are insuring benefits exactly as required by their governing rules, thereby protecting members.”
Geraint Jones, senior business development manager at Just Group, added: “This transaction demonstrates that the thriving insurance market can deliver solutions for schemes of all sizes, and with any type of complexity.”
Nicholas Roadnight, chair of the trustee board of the Brockhampton Pension Scheme, said: “We are delighted to have secured this full buy-in, which represents a major milestone in our long-term journey to safeguard members’ benefits.
“Having completed a pensioner-only buy-in previously, this transaction builds on that strong foundation and gives us full coverage across all members.”
