On the go: Advertising giant WPP has entered a £250m buy-in contract with the Pension Insurance Corporation, adding to a £140m transaction already completed with the same insurer in 2018.
The new transaction, split across two schemes, brings the total of insurance contracts purchased to £390m – in excess of the present value of UK liabilities stated in its latest annual report and accounts.
Chris Hawes, a principal at the transaction’s lead adviser, Mercer, confirmed that the communications service group has insured “virtually all its legacy UK defined benefit obligations”.
Recent market turmoil caused by governments’ reactions to the Covid-19 outbreak has had many trustees anxiously assessing the health of their schemes. However, widening credit spreads have also reportedly led to attractive bulk annuity pricing.
Jay Shah, chief origination officer at PIC, said: “Despite the recent severe market movements following the outbreak of Covid-19 in the UK, we continue to see a healthy pipeline of new business from trustees.”
According to PIC, WPP’s decision to transact with it was “based, in part, on the customer service provided since the original transaction”.
Peter Docking, director at Independent Trustee Limited and trustee chair for the two WPP schemes, said: “I’m pleased that we have successfully completed this buy-in, which brings further security to our pension scheme members.
“PIC provided us with a tailored risk transfer solution, and I am grateful for their flexibility and dedication in achieving this outcome. I’d also like to thank our advisers, Mercer and Sackers.”
