Insurance Corporation (PIC) has closed a partial buyout deal with the pension
scheme of GKN, a British aerospace and automotive technology business.
The GKN Group
Pension Scheme paid a £190 million ($235 million) premium as part of the
transaction, which transfers responsibility for a portion of its pensioners to
strategic adviser and insurance broker for GKN, and Cardano, GKN’s investment
advisor, advised on the transaction.
transaction marks an important step in the Trustee’s long-term strategy to
reduce risk as and when opportunities arise, whilst protecting the benefits of
its members,” said Rufus Ogilvie Smals, chairman of the GKN pension’s board of
trustees. "A further 20% of the liabilities of the original Scheme are now
“reduces risk while ensuring pensioner benefits remain unchanged,” PIC said.
has moved proactively and in a considered manner to achieve a strong outcome,”
said Matt Richards, Actuary at PIC. “This transaction is part of a long-term
de-risking strategy undertaken by the Trustee which allowed them to take
advantage of a window of favorable pricing. The Trustee should be congratulated
for acting in a decisive manner to reduce risk across all pensions, not just
those that have been insured.”
holders will become PIC policyholders as part of the risk-transfer deal, while
others will be transferred to a new GKN pension scheme.
commends the Trustee on its strategy to manage its pension obligations in an
innovative way,” said David Ellis, the Mercer UK leader for Bulk Pensions
Insurance Advisory and trustee adviser. “This latest transaction is testament
to the long-lasting benefit of taking proactive action to manage pension risk.”