The TotalEnergies UK Pension Plan has concluded a £1.2bn (€1.4bn) buy-in deal with the Pension Insurance Corporation (PIC), a specialist insurer of defined benefit (DB) pension schemes.
The transaction is the largest completed buy-in announced to date this year, PIC stated, adding that it follows the plan’s first buy-in with PIC for £1.6bn in 2014.
PIC has now insured all £2.8bn of the scheme’s DB liabilities. The latest buy-in secures the pensions of over 2,000 pensioners and dependants and 3,500 deferred policyholders.
LCP acted as lead transaction adviser for the trustee and company. The trustees received legal advice from Sackers and the company received legal advice from CMS. PIC was advised by Addleshaw Goddard.
Rob White, chair of the scheme, said that securing the benefits for its members has been the aim of the PIC trustees for many years. He added that it was “a complex and challenging transaction”.
Yadu Dashora, partner at LCP and lead adviser to the trustee and company, said: “Much has changed in the last 10 years since the plan’s first buy-in was concluded. Whilst large transactions are more common now, they usually have their own intricacies – this one had unique structuring requirements and a complex benefit structure reflecting the legacy of the company’s business.
“But, as ever, a combination of good preparation and close collaboration between all parties meant we were able to overcome these challenges and negotiate this sizeable transaction with PIC, achieving a really attractive outcome for the plan.”
Tristan Walker-Buckton, co-head of origination at PIC, said: “Repeat transactions such as this rely on the excellent relationships fostered, in this case over a decade ago, with the aid of LCP. I would expect to see more schemes in the market complete repeat transactions, such as this, when pricing objectives have been met.”
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