Liberty International: Pension insurance buyout announced

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Strategic Finance
Written by Gary Howes   
Thursday, 04 February 2010

Mercer provides key brokerage role.

 

Liberty International (LON:LII), the FTSE 100 property giant, has announced today that Pension Insurance Corporation (PIC) will insure the company’s defined benefit obligations.

Liberty International and the Trustees of the Liberty International Group Retirement Benefit Scheme say that PIC will insure the company’s defined benefit obligations via a buyout deal worth £61m.

The £61m figure comprises of £46m in Scheme assets and £15m additional Company contribution.

The transaction was arranged by Mercer as broker and actuarial and investment adviser to the Trustees.

Liberty International say the deal followed a, "competitive tender process involving a number of leading insurers with security, price and execution ability as the Trustees’ key selection criteria. The ability to complete the transaction speedily was seen as an additional benefit."
 
Akash Rooprai, lead broker for the transaction and a Principal at Mercer, commented that  “PIC’s flexible approach, efficient execution and keen pricing secured them this contract. This is another example of a FTSE100 company that has implemented a successful pension de-risking strategy in relation to its defined benefit obligations.

"It demonstrates how purchasing insurance can enable companies to focus on their primary business objectives rather than the management of increasingly legacy pension obligations. I believe that we will see this market continue to grow in 2010.”
 
David Bramson, Chairman of the Trustees, said “We are very pleased with Mercer’s advice, negotiations with the insurers and management of the transaction, which has resulted in an excellent result for the Scheme.”
 
Ian Durant, Liberty International PLC’s Finance Director, said “We are pleased that the Trustees, together with their advisers Mercer, have successfully completed this transaction. Liberty International has protected the members’ interests while removing the uncertainty associated with the funding of defined benefit schemes at an acceptable cost to the company.”


 

 
 
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