Pension Insurance Corporation (PIC) has concluded a pension insurance buy-in with the trustee of the Somerfield Pension Scheme, insuring £425m of pension liabilities.

Today’s (17 January) announcement will mean that the trustee will retain responsibility for paying the scheme’s members, although they will receive regular payments from PIC to fund pension payments in the future.

The Somerfield Pension Scheme is one of several schemes sponsored by the Co-operative Group, which is in aggregate with around £13bn of liabilities.

The lead transaction adviser to the trustee was Aon, with legal advice from Eversheds Sutherland and investment advice from Mercer. PIC was advised by Herbert Smith Freehills.

Commenting on the transaction, Independent Trustee Services executive chairman and trustee chair, Chris Martin said: “This buy-in is the result of many years of hard work as we pursued a long-term de-risking strategy and I am pleased that the Co-op and trustee have been able to work together to complete it in what have been volatile market conditions.”

In 2018, PIC wrote £7.1bn of new business with the trustees of 30 pension schemes, up from £3.7bn across 20 schemes in 2017.

Aon Risk Settlement Group principle consultant, Tom Scott added: “The transaction represents a tremendous outcome for scheme members, and the Co-op Group.

“It reflects the vibrant bulk annuity market, but also the preparedness of the scheme, which is a vital factor in ensuring that insurers focus on a particular transaction over the many other opportunities brought to them.

“It also gets the 2019 market off and running in what promises to be a record-breaking year."

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