The £150m Institution of Engineering and Technology ("IET") Superannuation and Assurance Scheme has completed a £32m medically underwritten buy-in.
The deal, completed earlier in the year with an unnamed insurer, covers liabilities relating to pensioners with the highest value benefits, and was secured at just above the scheme's technical provisions.
Hymans Robertson, which advised the trustees on this transaction, said the scheme and sponsor had recognised they were exposed to a significant concentration of risk, with a small number of pensioners representing a very large proportion of their liability.
Their objective was to tackle this risk in a cost effective way, to improve member security and reduce financial volatility.
BESTrustees' Harold Lewis, who sits on the trustee board said: "The trustees are delighted to have been able to insure the section of its pensioner liabilities that represented the greatest concentration of risk. Furthermore, to complete this insurance at a highly competitive price that was close to our technical provisions reserves is a great outcome for all scheme members."
IET director of finance and planning Ed Almond said the buy-in was a welcome step and the sponsor shared the trustees' goal of de-risking the scheme.
Hymans Robertson head of buyout Solutions James Mullins (pictured) said: "Pricing has been such that the IET Scheme, and pension schemes more generally, could exchange gilts (a broad matching asset) for a medically underwritten buy-in (a perfect matching asset, including protecting against life expectancy and proportion married risk) without any cost implications nor any need to increase company contributions.
"Medically underwritten buy-ins have now covered around £2bilion of liabilities across well over 50 pension schemes, from a standing start in 2013."
The medically underwritten bulk annuity market has been dominated by Just Retirement, which has written more than £600m of business this year, and Partnership, which has completed deals worth almost £100m.
The two insurers are set to merge in 2016, after their businesses were hit by the retirement flexibilities introduced in the 2014 Budget.
Aviva Life & Pensions has concluded an £875m buy-in with its own staff pension scheme, following on from a similar transaction last year.
Nearly every trustee is confident of the next stage in their scheme’s strategy, despite almost an equal number being forced to consider replacing plans within the prior 12 months, according to research by Barnett Waddingham.
Companies could be overstating their pension liabilities by up to £60bn due to their life expectancy assumptions, according to XPS Pensions Group.
Just Group has completed a £74m pensioner buy-in with the UK pension scheme of a US-listed engineering business.
Defined benefit (DB) schemes that provide GMPs must revisit and, where necessary, top-up historic cash equivalent transfer values (CETVs) that have been calculated on an unequal basis, a landmark court judgment said last week.