4/2/2010
By Sophie Baker
Pension Insurance Corporation (PIC) has agreed a mammoth deal to insure the benefits for members of the Liberty International Group Retirement Benefit Scheme.
The £61million buyout deal, made up of £46million in scheme assets and £15million in additional company contribution, will see PIC fully insure the liabilities of the listed property company's scheme.
The transaction was arranged by Mercer. Akash Rooprai, lead broker for the transaction and a principal at Mercer, said that the deal was a sign that buyout market was set to grow again in 2010.
"Purchasing insurance can enable companies to focus on their primary business objectives rather than the management of increasingly legacy pension obligations," he said.
Liberty International finance director, Ian Durant, added: "We are pleased that the trustees, together with their advisers Mercer, have successfully completed this transaction. Liberty International has protected the members' interests at an acceptable cost to the company."
The deal tops off a good news day for PIC's parent company Pension Corporation, which announced that its 2009 preliminary results showed that the group was the leader of the bulk pension insurance market, transacting £1.1bn in new pension insurance business.
The group had an embedded value of £618million at 31 December, a 50 per cent increase over the year, and embedded value earnings in the year of £202million. It insured around 45,000 pension fund members, with £3.3bn in assets under management.
"I am delighted that 2009 was a very successful year for the business," said Sir Mark Weinberg, group chairman. "Pension Insurance Corporation was able to win some very significant transactions when faced with strong competition from the legacy players. I believe that pension fund trustees are coming to see us as the market leader and the value of this cannot be underestimated."
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