UK Chamber of Shipping extends pension buy-in

The trustees of the UK Chamber of Shipping’s defined benefit (DB) pension plan have agreed an extension to its buy-in arrangement for the scheme.

The arrangement, which was initially agreed with Pension Insurance Corporation (PIC) in January 2013, includes the deferred members of the plan, representing about 20% of the scheme liabilities, and allows the trustee to proceed to a full buy-out.

The transaction covers an additional £9 million of pension liabilities, adding to the £40 million of pensioner liabilities already insured with PIC.

The trustees were advised by KPMG and Wragge and Co.

Richard Barker, chief financial officer at UK Chamber of Shipping, said: “The trustee, the sponsor and PIC engaged in further discussions after the initial buy-in arrangement.

“We were pleased and impressed with [its] arrangements for the pensioners and so [it was] a natural home to insure the rest of the plan once the trustee board and the employers were able to agree additional funding to move to buyout.”

Robert Bass, director at KPMG, added: “This transaction, which substantially completes the plan’s risk-reduction journey, was not envisaged a few months ago.

“The ability of all parties to move quickly, however, ensured that the trustee was able to secure the favourable terms offered by PIC inside seven weeks.”

Jay Shah, co-head of business origination at Pension Insurance Corporation, said: “This represents an increasing trend, where our [employer] clients, having insured some liabilities with us, ask us to look at securing further liabilities either for the same scheme or other schemes with the same sponsor.

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“As the de-risking market continues to develop, we expect this trend to pick up.”

The plan is a multi-employer scheme shared by the UK Chamber of Shipping and the International Chamber of Shipping.