PIC insures £425m of Co-op pension liabilities

Pension Insurance Corporation (PIC) has concluded a pension insurance buy-in with the trustee of the Somerfield Pension Scheme, insuring £425m of pension liabilities.

Today’s (17 January) announcement will mean that the trustee will retain responsibility for paying the scheme’s members, although they will receive regular payments from PIC to fund pension payments in the future.

The Somerfield Pension Scheme is one of several schemes sponsored by the Co-operative Group, which is in aggregate with around £13bn of liabilities.

The lead transaction adviser to the trustee was Aon, with legal advice from Eversheds Sutherland and investment advice from Mercer. PIC was advised by Herbert Smith Freehills.

Commenting on the transaction, Independent Trustee Services executive chairman and trustee chair, Chris Martin said: “This buy-in is the result of many years of hard work as we pursued a long-term de-risking strategy and I am pleased that the Co-op and trustee have been able to work together to complete it in what have been volatile market conditions.”

In 2018, PIC wrote £7.1bn of new business with the trustees of 30 pension schemes, up from £3.7bn across 20 schemes in 2017.

Aon Risk Settlement Group principle consultant, Tom Scott added: “The transaction represents a tremendous outcome for scheme members, and the Co-op Group.

“It reflects the vibrant bulk annuity market, but also the preparedness of the scheme, which is a vital factor in ensuring that insurers focus on a particular transaction over the many other opportunities brought to them.

“It also gets the 2019 market off and running in what promises to be a record-breaking year."

    Share Story:

Recent Stories

Responsible investing
Laura Blows speaks to Standard Life head of investment solutions, Gareth Trainor, about the latest responsible investment trends and developments for providers, pension schemes and their members

ESG and member engagement
Laura Blows speaks to Legal &General Investment Management head of DC, Emma Douglas, and Nest Insight Director of Research and Innovation, Jo Phillips, about member attitudes towards ESG and how this may impact upon pension fund investments

Sovereign bonds and climate change considerations
In Pensions Age's latest podcast, Laura Blows is joined by Hilary Norris, Product Manager, Sustainable Investment, EMEA, FTSE Russell, to discuss sovereign bonds and climate change considerations

Climate Investing
Laura Blows speaks to Aled Jones, Head of Sustainable Investing for Europe at FTSE Russell, and Adam Matthews, Director of Ethics and Engagement for the Church of England Pensions Board, about the role of climate investing within a pension fund portfolio.

Managing volatility
In the latest Pensions Age podcast, Laura Blows speaks to Cambridge Associates head of European pension practice, Alex Koriath, about the Covid-related market volatility and how pension funds can prepare for the challenges ahead