PIC signs £2 billion pension insurance buyout with the Old British Steel Pension Scheme

23 October 2020

PIC publishes on its website:

“Pension Insurance Corporation plc (“PIC”), a specialist insurer of defined benefit pension funds, has signed a £2 billion pension insurance buyout with the Trustee of the Old British Steel Pension Scheme (the “Scheme” or “OBSPS”), guaranteeing future pension payments for all of the more than 30,000 members at, or above, PPF levels of compensation.

The Scheme entered PPF assessment in 2018 following the restructuring of Tata Steel UK Limited. PIC worked closely with the Trustee to establish that the Scheme had sufficient funds to support a buyout of the Scheme and, importantly, to enhance members’ benefits above those payable by the PPF for any members who lost out as a result of entering the PPF assessment. PIC was able to structure the transaction in a way that gave the Trustee price certainty in the current, volatile financial markets.

The Scheme will now go through a period of reconciling member benefits and calculating uplifts where applicable, whilst the overall benefits are guaranteed by PIC within a buy-in structure. The process is expected to complete towards the end of 2021, when the members will come out of the PPF and become direct PIC policyholders.

Open Trustees Limited has been the Scheme’s Trustee since 29 March 2018. It is an independent entity but is wholly owned by international law firm, Osborne Clarke LLP. The Trustee was advised by Barnett Waddingham LLP and Hogan Lovells. PIC was advised by HSF.”

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