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The Actuary The magazine of the Institute & Faculty of Actuaries

Home Retail Group completes £278m pensioner buy-in

PRIL has been paid cash and assets equivalent to £278m from the assets of the pension scheme. The amount was equal to the scheme's actuarially assessed value of the pensioner obligations and therefore the buy-in was financially neutral for both the pension scheme and the Group.

LCP says the buy-in, which completed on 27 May but was announced in Home Retail Group's half-year results, marks the 50th pension buy-in or buy-out transaction with a value of more than £100 million, reflecting the increasing numbers of pension schemes looking to de-risk by transferring liabilities to insurers.

"The trend for pension schemes to transfer risk to insurance companies is a growing one, but it is set against a back-drop of volatile financial markets," said LCP partner Clive Wellsteed (pictured).

"Deal flow is likely to remain lumpy as market conditions ebb and flow, but this latest milestone paints a picture of a vibrant market that has come of age."

"Looking back over the summer, many pension schemes considering buy-ins or buy-outs paused as market volatility took hold, and the outlook remains uncertain. However, there are some favourable buy-in opportunities in current conditions, particularly for pension schemes that have substantial allocations to gilts."