The trustee of the Merchant Navy Officers Pension Fund (MNOPF) has agreed a £490m buy-in transaction with Legal and General.

The £3bn fund was an early adopter of de-risking transactions, having completed its first bulk annuity transaction back in 2009 with Lucida Limited, which was acquired by L&G in August 2013.

Commenting, MNOPF chair Rory Murphy said: “This buy-in enables us to more effectively manage the risks faced by the fund as a whole. It is also good news for employers in the maritime and shipping industry, who have already saved many millions in deficit contributions over recent years as a result of our improved funding position.

“There is also a positive message here for the wider pensions community. A well-run fund, with strong governance and expert advisors, can deliver valued and sustainable benefits to its members while successfully managing the risks and costs faced by its employers.”

The announcement follows a £1.5bn longevity insurance transaction covering the benefits of the fund’s “new section” members in 2014, and the new buy-in arrangement covers all thefFund’s retirees since that date meaning the benefits of all current pensioners are now hedged against longevity risk.

MNOPF chief executive Andy Waring said: “Securing the benefits of our members has always been a significant part of the MNOPF journey plan. Our next milestone is to promote and grow the Ensign Retirement Plan, so that we can provide the same security in retirement for the next generation of maritime employees.”

L&G managing director of UK pension risk transfer Chris DeMarco said: “We are delighted that the MNOPF trustee chose to work with L&G and ultimately secure their members’ benefits with us. Our relationship with the trustee has been a long-standing one and we are pleased to be able to assist them in the next stage of their de-risking journey.”

Willis Towers Watson advised from the actuarial and investment side and Baker McKenzie on the legal side of this transaction.

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