The MIRA Retirement Benefits Scheme has completed a “highly unusual” £70m buyout with Pension Insurance Corporation by compromising its sponsor’s statutory debt to provide benefits higher than PPF levels.

The trustee of the MIRARBS, which also participated in the Universities Superannuation Scheme, was led towards the transaction after it was established the pension deficit could not be supported against the business of the sponsoring employer, MIRA.

MIRA sold its business and assets to automotive firm HORIBA, which will continue to operate under the name HORIBA MIRA Ltd. Following the sale, proceeds were then divided between MIRARBS, and the USS in agreed proportions.

The proportion assumed by MIRARBS was then used to enter into the £70m buyout with PIC, which subsequently will secure benefits in excess of PPF compensation.

The transaction received clearance from the Pensions Regulator and was advised by Wragge Lawrence Graham and KPMG.

MIRARBS trustee director Chris Martin said proceeding with the transaction and ending the uncertainty provided “the best outcome for members that was realistically achievable”.

“The trustee ran a pension insurance process simultaneously with the business sale process. We knew that if we could time the two parts of the transaction together then we had a chance of securing benefits in excess of PPF compensation levels," Martin said.

“The robust insurance process, led by LCP, led to very competitive pricing and risk transfer. The alternative would have been to fall into a PPF assessment process, which would have prolonged the uncertainty, added to costs and so depleted the assets available to provide benefits to members.”

LCP partner Michelle Wright said it is “highly unusual” for trustees to compromise a statutory debt and render their scheme ineligible for the PPF, but no other course of action would have been able to provide the certainty that the trustee could secure benefits above PPF compensation with all the protections of a regulated insurance company.

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