Tomkins Schemes agree £132m buy-in with PIC

The trustees of two pension schemes in the Gates group, the Tomkins Schemes, have agreed a £132m buy-in with the Pension Insurance Corporation (PIC).

The Tomkins Schemes previously completed a partial buy-in, with this second transaction meaning that all defined benefit (DB) pension liabilities of the schemes have been fully insured.

Capital Cranfield Trustee received legal advice on the deal from Hogan Lovells, while Mercer acted as the buyout consultant and actuary to the Tomkins Scheme, with Buck as the schemes' administrator.

Hogan Lovells also provided advice to the trustee on an actuarial equivalence conversion exercise in relation to a third scheme in the Gates group.

The firm explained that the Gates Scheme had a defined contribution section but with a contracted-out guaranteed minimum pension GMP underpin, which, according to Hogan Lovells, created complexity for both the Gates Scheme and members.

In light of this, the firm advised the trustee on implementing an actuarial equivalence conversion process whereby the underpin benefits were converted into either a pure GMP, or a pure GMP with additional defined contribution (DC) benefits.

Hogan Lovells pensions partner, Edward Brown, commented: “The trustee is a longstanding client of the firm and we are delighted to have helped it insure the benefits of all Tomkins Scheme members, and to have implemented a complex and relatively unusual actuarial equivalence exercise for the Gates Scheme on tight timescales.”

Trustee chair, Christopher Clayton, added: "The trustees have over many years been working towards ensuring that the Tomkins Schemes are fully funded and can be secured with an insurance company, to further guarantee the pension payments to members.

"I would like to thank our professional advisers at Hogan Lovells, Mercer and Buck for their hard work and professionalism to obtain this buy-in arrangement with PIC.”

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