Pension Insurance Corporation (PIC) has concluded a pension insurance full buy-in with the trustees of the Dresdner Kleinwort Pension Plan, insuring £1.2bn of pension liabilities.

The transaction covers the entire plan but has been split into two sections, a £0.9bn ‘final salary’ section and a £0.3bn ‘money purchase’ section.

This has allowed members of the money purchase section with DB and hybrid DC benefits the choice to either transfer their benefits into an alternative arrangement or convert them into pure DB benefits, which were then insured under the terms of the buy-in.

The Dresdner Kleinwort Pension Plan is part of Commerzbank, after it acquired Dresdner Bank in late 2009.

LCP acted as lead adviser on the transaction and legal advice was provided by Linklaters.

Commenting on the buy-in, PIC head of origination structuring, Uzma Nazir said: “Given the unusual hybrid DC and DB benefit structure the trustees required flexibility from us to ensure that both sections of the plan were insured in line with their requirements.

“We are of course delighted to complete this, the biggest transaction of the year so far and one of the largest to date.

“Affordability of buy-ins and buyouts has improved significantly in the past year and this is driving a record number of schemes and companies seeking to insure in full.”

LawDeb trustees chairman, David Curtis added: “We are very pleased to have completed the insurance of both sections of the Plan with the support of Commerzbank.

“This transaction required a high level of creative thinking by our advisers, LCP, in designing a structure combining the member choice programme with the insurance transaction.

“I want to thank PIC for their flexibility, especially in relation to the insurance of the money purchase section, which is an unusual transaction, and, I believe, a great result for the membership.”

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