Following a £300 million ($375 million) buy-in last year, telecommunications firm Alcatel-Lucent has insured a further £100 million of its UK plan with Pension Insurance Corporation (PIC).
The buy-in covers a portion of the participants in the Lucent segment of the pension scheme, PIC said in a release.
Last year’s buy-in covered retirees under the larger Alcatel pension.
“We are delighted to have been able to complete this well-timed and speedily executed buy-in as part of our de-risking program,” said Martin Couzens, chairman of Alcatel-Lucent’s pension trustees. “The efficiency was a credit to the enthusiasm of our advisers.”
As with the first buy-in, Aon Hewitt served as an advisor on the transaction, which took place “within a matter of weeks,” according to Dominic Grimley, a risk settlement advisor at the consultant.
“The speed of execution of this transaction showed the experience and commitment of the [pension],” Grimley said. “It helped that the client had clearly established objectives.”
Buy-ins of this nature play an important role in the de-risking process because they “enhance security” for pension funds, said Uzma Nazir, head of origination structuring at PIC.
“After a very busy few months in the market, we expect this trend to continue for the foreseeable future,” Nazir said. “We are proud to have been able to help the trustees efficiently de-risk.”
PIC Closes Another Pension Buyout