The Pensions Trust has struck a deal with Paternoster to secure the pension benefits of the pensioner section of its multi-employer pension scheme
The Trust, which operates a multi-employer scheme for the charity, social, educational, voluntary and not-for-profit sectors, provides an occupational pension for employees of the 3,000 employers that currently participate in its Growth Plan scheme.
Following the buyout, 10,500 pensions are now protected by a bulk annuity policy.
Stephen Nichols, chief executive of The Pensions Trust said: "As with many defined benefit schemes under pressure as a result of lower investment returns, improvements in longevity and the unintended consequences of legislation, the investment in an insurance policy with Paternoster, a regulated insurer, offers increased security for scheme members. The solution selected means that pensioner liabilities have been fully matched by policy. the way the pensions are administered are unchanged. Paternoster will make payments to The Pensions Trust each month so that the Trust continues to make pension payments as before."
John Alleston, chair of Verity Trustees - the corporate trustee of The Pensions Trust - added: "The decision to reduce downside risk was not straightforward for the Growth Plan because it also all but eliminates the prospect of future discretionary bonuses. But we have to be realistic and prudent in a world which economics and legislation has made much more difficult for pension funds generally and the Growth Plan in particular."