Smiths Group completes £250m buy-in with PIC

Global technology business Smiths Group has concluded a £250m pension insurance buy-in for its pension fund with the Pension Insurance Corporation.

PIC agreed the deal with the trustee of the Smiths Industries Pension Scheme, and it covers more than 3,000 members of the scheme. Smiths Group, which is listed on the London Stock Exchange, has previously insured £170m of liabilities with another scheme through PIC.

Chair of the trustee Nicholas Godden said the buy-in is a “significant step” in the scheme’s de-risking plan. “PIC has been flexible and focussed on helping us achieve our aims and I want to thank both them and our advisers, Aon Hewitt, for their hard work,” he added.

PIC actuary Uzma Nazir, said: “The trustee has been actively managing risk in the pension scheme and this buy-in was the natural next step in that process for them. Whilst there has been volatility in the financial markets post Brexit, the trustee had the correct governance structures in place to allow them to complete this transaction within their preferred timeline. This is a credit to them. PIC is of course proud that we were able to insure liabilities within a second pension scheme sponsored by Smiths Group.”

The lead advisor to the Trustee on the transaction was Aon Hewitt and its risk settlement adviser Dominic Grimley said the speed from all parties was “vital to the success of this transaction”.

“In volatile markets, we agreed a mechanism with PIC to stabilise pricing as soon as it met the testing criteria. The insurance was then tailored to support further de-risking over time.”

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