The Merchant Navy Officers Pension Fund (MNOPF) has entered into a bulk annuity deal with Rothesay Life, covering around £680m of pension benefits, making it the largest bulk annuity transaction to have been completed during 2012.

The insurance policy covers benefits due to around 40,000 members of the fund’s Old Section, which closed in 1978. After two other deals with Lucida in 2009 and 2010 which secured around half of the Old Section’s liabilities, the deal with Rothesay Life means all entitlements of this section of the fund are now fully insured.

MNOPF chairman Peter McEwen said: “Today’s announcement is good news for our members. It means that certainty and security over pension benefits have now been extended in full to all benefits of the Old Section through insurance policies.

“Our top priority in negotiating this arrangement has been to secure the benefits of all our members. This move not only achieves that goal, it also enables us successfully to manage the risks faced by the fund as a whole, which is good news for employers too.”

MNOPF chief executive Andrew Waring added: “Recent years have been an extremely challenging period for pension funds, during which the MNOPF has been very actively pursuing the goal of improving the security of members’ benefits.

“Improving the funding position from a little over 80 per cent in 2009 to full funding today, and completing this transaction, have been a tremendous achievement in these very difficult markets. Our actuarial, investment and settlement advisers, Towers Watson, and our legal advisers Baker & McKenzie have been outstanding in helping the trustee reach this position.”

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