Nova Chemicals enters into pension insurance buy-out agreement

Nova Chemicals has entered into a pension insurance buy-out agreement with Pension Insurance Corporation.

The buy-out agreement covers liabilities of £30 million and the manufacturer’s 155 pension scheme members.

It is the result of a risk management approach taken by the scheme’s trustee, which saw the trustee invest in low-risk assets and away from equities, with the aim of minimising the scheme’s exposure to potential market turbulence.

The organisation also received advice and guidance from consultancy Mercer, law firm Squires, Sanders and Dempsey, and JLT Benefit Solutions.

Martin Sanderson, trustee of Nova Chemicals’ pension scheme, said: “This buy-out agreement was made possible by close co-operation between the organisation, trustee and professional advisers, working towards agreed objectives.

“The buy-out agreement brings further increased security to members’ benefits for the long-term.

Mitul Magudia, partner at the Pension Insurance Corporation, added: “The pensions buy-out market is particularly busy in 2011, whereas in the previous three years pensioner buy-ins were more prominent in the risk transfer market.

“Pension Insurance Corporation is involved in auction processes for buy-outs and buy-ins for small and medium pension funds totalling approximately £1.5 billion, and large pension funds where we are participating in processes totalling approximately £8 billion.”

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