Prudential has sealed a £680 million ($1 billion) buy-in deal with the Northern Bank Pension Scheme, one of the biggest de-risking deals in the UK this year.
The arrangement covers “most” of the current pensioner members of the fund, according to advisers LCP.
Northern Bank is based in Northern Ireland and is owned by—and trades under the name of—Danish firm Danske Bank. At the end of 2012 the pension was valued at £852 million, with a surplus of £82 million.
Michelle Wright, partner at LCP, said the arrangement “incorporates strong security provisions to maximize the security of members’ benefits”.
“The policy also includes innovative provisions and flexibilities to add new retirees to the policy in future on efficient terms,” she added.
The Northern Bank deal’s size overtook the year’s previous biggest buy-in/buy-out transaction, Rothesay Life’s £675 million buy-in of the Lehman Brothers International UK pension. The UK’s largest de-risking transaction this year remains a £2 billion longevity swap deal between the ScottishPower pension fund and three reinsurers, overseen by Abbey Life.
In North America, Kimberley-Clark offloaded $2.5 billion of pension liabilities to Prudential Insurance Company of America and MassMutual in February, while Canadian telecoms group Bell sealed the country’s biggest de-risking deal in March with a C$5 billion longevity swap with Sun Life Financial.
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