One of the UK’s leading specialist pension insurers is signing a £ 1.6 billion deal to take on pension funding obligations from the Merchant Navy Officers Pension Fund (MNOPF).
Sky News understands that Pension Insurance Corporation (PIC) will announce Monday that it is transforming an existing financial arrangement with the scheme into a buy-in – guaranteeing the pensions of around 14,000 members.
It is the latest in a series of agreements entered into by the trustees of the merchant navy pension scheme, established in 1937 to provide retirement and death benefits to shipping company officers.
MNOPF signed its first pension insurance contract in 2009 with a company that subsequently joined Legal & General and has since signed other agreements of varying magnitude and complexity.
The naval scheme has a total of around £ 3 billion in liabilities.
“De-risking” budget transactions like the one announced on Monday have become commonplace in Britain.
The sector has grown considerably in recent years as trustees and company boards have attempted to manage pension risks more effectively.
PIC, which is privately owned by a consortium of investors, is a major player in the sector.
At the end of last year, PIC had insured 225,000 members of the pension scheme and had £ 40.9 billion in financial investments.
In addition to Aviva, it recently agreed to insure around £ 2 billion of the Cooperative Group’s pension liabilities.
He also entered into agreements with British American Tobacco and Marks & Spencer for a total value of £ 4.3 billion, plus a previous £ 425 million deal with the Co-op.
As for the investments in his balance sheet, he announced that he is investing £ 2 billion in social housing projects and £ 700 million in renewable energy.
PIC is not the only specialist insurer to enter into big deals.
Last year, Legal & General agreed on a partial buy-in of £ 4.6 billion with Rolls Royce Holdings, the largest transaction of its kind in the UK.
Meanwhile, Rothesay Life recently unveiled a £ 3.8 billion buyout with Asda.
PIC declined to comment on Sunday, while MNOPF was not met for comment.