Pension Insurance Corporation (PIC) has completed its third
major de-risking deal of 2016, sealing a buy-in with a UK glass manufacturer
worth £230 million ($303 million).
The transaction covers roughly 13% of the liabilities of the
Pilkington Group’s pension, and follows a £1 billion longevity swap executed in
Pilkington is the latest plan sponsor to take advantage of
market conditions post-Brexit as high-quality corporate bonds have become
cheaper relative to UK government bonds. The ICI
Pension Fund secured a £750 million buy-in just eight working days after
the June 23 referendum had sent gilt prices soaring.
John Baines, partner at Aon Hewitt, which advised on the
transaction, said the pension negotiated a “price lock” to ensure it was able
to “capitalize on the attractive pricing currently available in the bulk
Uzma Nazir, actuary at PIC, said there had been “a tangible
increase in interest from trustees in buy-ins since the Brexit referendum.”
PIC has completed “a number of transactions over the past few weeks,” Nazir
added. None of these have been made public.
Prior to the referendum, PIC secured a £900 million buy-in with Aon’s UK retirement
plan in May. This followed a £300 million buy-in and reinsurance deal with a UK
pension attached to communications giant Siemens. The specialist pension
insurer also backed the UK’s biggest
ever full buyout in November, a £2.4 billion deal with the Philips UK
Risk to De-risk