UK - Citigroup's acquisition of the sponsor company for the UK-based Thomson Regional Newspaper pension fund has been branded as a copy-cat opportunistic move by Pensions Corporation.
In August, Citigroup announced it had acquired the fund and would transfer financial responsibility for it to Citi subsidiary, Insurance & Pensions Structured Solutions Group (IPSS).
Francis Fernandes, head of pensions actuarial at Citi, said if it managed to run a liability driven investment strategy on the pension fund's assets it could potentially obtain any surplus when the fund wound up.
Edmund Truell, group chief executive of Pensions Corporation, claimed Citigroup had copied Pensions Corporation's Thorn and Threshers deal of three months ago.
Truell said: "It was an opportunistic move by Citigroup as far as we can make out. Our good idea has lasted about two months before someone has copied it."
Truell explained the difference between Pensions Corporation and Citigroup was that Pensions Corporation was an FSA authorised insurance company.
However, Martin Potter, partner at Hymans Robertson, said the acquisition at face seemed an exciting development for companies looking to offload their pensions risk.
Potter said: "The interesting spin is that Citigroup is keeping their pension buyout on the cheap side of the regulatory fence. The reserving requirements for traditional insurance companies are far more stringent than for companies."
Simon Gadd, head of annuities at Legal and General, warned there were significant implications in keeping a pension scheme within the Pensions Regulator remit, as opposed to moving within the FSA regime when purchasing bulk annuity contracts.
Myles Pink, business development director at Paternoster, said: "The securing of member benefits through a buyout with a regulated insurance company brings a greater level of security for members than the acquisition of the sponsoring employer, albeit by a company with a strong covenant such as Citigroup."
Kim Gubler says it is time that schemes and administrators reassess SLAs and look at what real people need from their pension schemes and when
The Pensions Regulator (TPR) is focusing on reducing the number of "poorly-run" schemes as it seeks to improve standards across the board.
Prudential Retirement has completed around $2.6bn (£2bn) of reinsurance contracts for UK pension scheme longevity risk since the start of the year, it has disclosed.
Funding standards for DB schemes have increased exponentially over the past decades. Con Keating says such significant overstatement of liabilities will lead to pushback through the courts.