The National Union of Mineworkers’ (NUM) has entered into a pension insurance buy-in to manage the risk of its defined benefit (DB) pension scheme.
The transaction, which will secure pensioner liabilities and reduce risk for the scheme, was advised by trustee Barnett Waddingham and conducted by Metlife Assurance.
The NUM scheme’s investment strategy meant that it had benefited from historically low gilt yields, which made a deal to transfer around £27 million of assets to insure pensioners’ guaranteed benefits financially attractive. †
Paul Jayson, partner at Barnett Waddingham, said: “Our arrangement with MetLife Assurance meant that, having spotted an opportunity for an advantageous deal, liabilities could be secured quickly.
“Even the shortest delay involved with the usual buy-in process could have led to this opportunity disappearing. The trustees are now in the position of having the bulk of their liabilities secured and can concentrate on managing the remainder of their assets to provide discretionary pension increases.”
Wayne Daniel, chief executive officer at MetLife Assurance, added: “The†process we have in place with †Barnett Waddingham meant that much of the preparatory work needed to support this buy-in had been previously completed.†
“We were then able to work flexibly with the adviser, employer and trustees to effect a pensioner buy-in, supporting their efforts to capitalise on favourable market conditions, secure member future benefits and remove risk from the balance sheet.”
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