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The Actuary The magazine of the Institute & Faculty of Actuaries

ITB fund agrees £153m pension buy-in with PIC

The transaction, relating to the closed section of ITB's pension fund, came following a review of the investment strategy in April this year in which the trustees asked their investment advisers to explore ways of increasing the stability of the closed fund's funding level.

ITB operates both an open and closed fund. The closed fund has no participating employers paying contributions; it has some 1,510 pensioners and dependents and 152 preserved pensions.

Under the agreement, in return for the required premium PIC pays the trustees an agreed amount on agreed dates and the funds' office continues to pay the regular instalments to pensioners as normal.

The most recent funding valuation of the closed fund showed that on 31 March, 2009 the scheme had assets worth £196.7m and liabilities of £189.1m.

ITB trustee chairman Peter Rogerson said: "In proceeding with the buy-in the trustees have taken similar action to the trustees of many other major UK pension schemes who had completed buy-ins over the last few years. Prior to the purchase was the completion of legal due diligence, which served to confirm material facts in relation to the purchase and the evaluation of the financial strength of PIC."

Pension Insurance Corporation senior actuary Matt Barnes added: "We are very pleased to have worked with the trustees and their advisers in insuring the pension fund in a transaction that improves pensioner security."

LCP and Mayer Brown advised the trustees.