PIC completes £1.3bn pensions buy-in with Siemens

Pensions Insurance Company (PIC) has completed a £1.3bn buy-in with Siemens, covering around 6,000 pensioners.

The trustees of the Siemens Benefit Scheme agreed the deal with PIC in what is the third bulk annuity arrangement between the pair.

The first was a £100m buy-in in 2013 and the second covered £200m of liabilities in 2015. The recent deal was accounted for in the firm’s £2.3bn half year results for 2018.

Siemens Benefit Scheme chair of trustees, Joanna Matthews, said: “We are delighted to have completed this transaction, notable for its speed and efficiency and I would like to thank everyone involved for their hard work in making this happen. This is a great result for all members of the Scheme, reducing overall levels of risk.”

Aon and Sackers advised the trustees, while KPMG advised Siemens and CMA advised PIC.

Siemens head of pensions, John Smith, commented: “We are proud of what we have achieved with this latest buy-in, which is part of Siemens’ long-term pension de-risking strategy. This is one of a number of UK DB pension schemes sponsored by Siemens and achieving this is a significant milestone for the company.”

PIC actuary, Matt Richards, said: “The trustee’s decision to enter into a bulk annuity reflects a market-wide trend. We are delighted that the trustees selected PIC as their partner for this transaction.”

Earlier this week, PIC completed a £850 million buyout with PA Consulting, in the first buyout deal to secure the pricing of an enhanced transfer value exercise within the buyout pricing.

According to Hymans Robertson, total pension scheme buy-in and buy-out volumes are set to reach an all-time record of around £18bn in 2018, after a busy first half of the year for the market.

The consultancy says that the total value of buy-ins and buy-outs in the first six months of 2018 has been more than the value recorded in each year up until 2013, including 2014, which recorded a previous high of £13.2bn in transactions.

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