Dairy Crest has announced that its pension fund has purchased a second bulk annuity, which insures the balance of liabilities for pensions in payment.
Mercer was the investment consultant for the deal. Kevin McLaughlin, a principal in Mercer’s financial strategy group, said: “Getting the deal right involved a lot of detailed work on the fund’s investment strategy. As a buy-in deal involves a transfer of a large amount of assets, it can have knock-on impacts for the overall investment strategy.
“While the buy-in policy removes a lot of interest rate, inflation and mortality uncertainty associated with the pensioner liabilities, Mercer worked with the trustee to put in place an appropriate investment strategy for the non-insured deferred liabilities. Of primary concern was to ensure that sufficient long-term inflation cover was in place.”