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The Actuary The magazine of the Institute & Faculty of Actuaries

Nova Chemicals enters pension buyout agreement with PIC

The insurance buyout agreement covers liabilities of £30m and the Plan's 155 members, mainly based in Manchester.

The pension buyout agreement was the result of a risk management approach taken by the Trustee with the support of the sponsor. This saw the Trustee invest over time in low risk assets and away from equities, with the aim of minimising the Plan's exposure to potential market dislocations.

Martin Sanderson, Plan Trustee, said: "This buyout agreement was made possible by close co-operation between the company, Trustee and professional advisers, working towards agreed objectives. The buyout agreement brings further increased security to members' benefits for the long term. Pension Insurance Corporation's tailored solution and competitive financial proposition helped secure their selection ahead of several other insurers. Mercer's advice in helping obtain the right contract and advice from Squires, Sanders & Dempsey (UK) LLP and JLT Benefit Solutions in completing the process was invaluable."

Mitul Magudia, Pension Insurance Corporation, said: "The pension buyout enhances what is already proving a successful year to date for Pension Insurance Corporation, having already written approximately £500m of new business. The pension buyout market is particularly busy in 2011, whereas in the previous three years pensioner buy-ins were more prominent in the risk transfer market. PIC is involved in auction processes for buyouts and buy-ins for small and medium pension funds totalling approximately £1.5bn; and large pension funds where we are participating in processes totalling approximately £8bn."

Akash Rooprai, Mercer, said: "We were pleased to be able to help the Plan Trustees and the Company obtain the right deal for the Plan members, in terms of price, member security and other contractual terms."