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The Actuary The magazine of the Institute & Faculty of Actuaries

Pension Insurance Corporation in £19m deal to insure George Hammond scheme

The Pension Corporation has announced that the Trustees of the George Hammond PLC Retirement Benefits Plan have entered into a pension insurance buyout agreement with Pension Insurance Corporation (PIC). The Plan has liabilities of £19million and 152 members.

The Corporation said that the buyout marks the end of a strategic de-risking programme which the Trustees have had in place for some time, enabling them to move quickly at the end of the process to capitalise on improved affordability. KPMG acted as advisors to the trustees throughout the buyout process and the transaction heads of terms were agreed within 24 hours with positive cooperation from all parties.

George Hammond PLC is a privately owned shipping business established in 1767 operating in the English Channel and the North Sea.

PIC says that the transaction is an example of its success in working with family-owned, private businesses such as Arnold Laver, Swan Hill and Walthamstow Stadium, that are keen to secure their pension fund members’ benefits.

David Ryeland, chairman of Trustees of the George Hammond PLC Retirement Benefits Plan said: "Although we have been looking at de-risking for some time, we had to move extremely quickly to ensure that we were able to take advantage of significantly improved levels of affordability. The markets have been volatile for some time now and we did not want to miss the opportunity to secure our members’ benefits.

"The PIC team have been very responsive at all stages of this transaction, including our initial investigations into buyout structuring and pricing. We were very pleased that PIC was able to work with us to such short deadlines and ensure we were able to complete the transaction."

Matt Barnes, senior actuary, Pension Insurance Corporation, said: "We were very impressed with the decision-making of the Trustees who acted as soon as they saw that improved affordability gave them a window within which they were able to transact. KPMG as advisers to the Trustees also played a key role in bringing this transaction to a successful conclusion."

The announcement follows PIC’s recent assertion that pensions risk reduction transactions are set to rise in the current climate due to affordability.