IMI deferred fund agrees sixth partial buy-in with PIC

The trustee of the IMI 2014 Deferred Fund has agreed a £175m partial buy-in with the Pension Insurance Corporation (PIC), covering liabilities for the remaining 1,378 uninsured scheme members, around 97 per cent of which are deferred members.

This is the sixth partial buy-in undertaken by the scheme, with PIC having insured approximately £1bn of liabilities sponsored by IMI plc since 2016, including a£250m partial buy-in in January 2022.

PwC acted as lead transaction advisors for the IMI and pension scheme's joint working group, while the scheme also received actuarial advice from WTW, investment advice from Aon, and legal advice Squire Patton Boggs.

Chair of the trustee, Greg Croydon, highlighted the transaction as the "culmination" of the scheme's long-term de-risking journey to insure the scheme's pension obligations, confirming that the liabilities of the scheme are now fully insured.

"We’re delighted that we have been able to complete this final transaction with PIC, with whom we have a long standing and successful relationship and who were able to be flexible to meet the specific circumstances of this deal in 2022," he continued.

“We had confidence in PIC’s ability to continue providing high quality customer service to us and our members. We would like to thank PwC for their advice and a solutions-based approach to enable execution of the final buy-in during volatile and fast changing market conditions.”

Adding to this, PIC head of pricing, Tristan Walker-Buckton, highlighted the "very high proportion" of deferred members as a key aspect of the deal, explaining that insuring these members required "close collaboration with the trustee".

She added: "We are naturally very proud to have been able to complete this final transaction with them.

“We were able to offer a solution for the fund’s illiquid assets by providing flexibility in the payment structure, enabling the trustees to transact when they wanted to rather than waiting to sell down their remaining illiquid assets.

"IMI is an excellent example of how a first class de-risking exercise should be run and the trustee should be congratulated on the execution of their plan.”

Adding to this, PwC UK head of pension risk transfer, Swapnil Katkar, stated: “We are delighted to work with IMI and the trustee in structuring and executing this de-risking transaction.

"We were able to collaborate with our client, advisors to the fund, and PIC to implement a suitable price lock strategy and execute the buy-in, during a volatile and challenging market environment.

“The transaction means that member benefits are now secured under the insurance regime, enabling IMI to eliminate uncertainty around costs and cash as the corporate sponsor of these pension obligations.”

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