The Sea Containers 1983 Pension Scheme has been fully insured in a bulk annuity deal completed by Aviva, almost a decade after receiving the regulator's first financial support direction (FSD).
Announced today, the £187m bulk annuity transaction will enable the trustees of the defined benefit (DB) scheme to secure benefits above Pension Protection Fund (PPF) compensation levels for approximately 750 members.
Link ATL Pension Trustees chairwoman of trustees Jane Fryer added: "We are delighted to have been able to secure benefits for members above PPF compensation levels and to be in a position to wind up the scheme, some years since the scheme (together with the Sea Containers 1990 Pension Scheme) received the first FSD from The Pensions Regulator (TPR).
"We feel the scheme has gained from recent competitive rates in the market."
Mercer bulk annuity specialist and lead adviser to the scheme's trustees Neil Rogers added the buyout would see the members of the scheme provided "with the long-term security they deserve."
Link ATL Pension Trustees Limited (formerly Capita ATL Pension Trustees Limited) and part of Link Asset Services, was the professional trustee on the board in addition to the scheme's long-standing trustees. The trustees were advised throughout the process by Mercer and Gowling WLG.
Commenting on the transaction, Aviva deal management lead Stephen Purves, said: "We're continuing to see very strong demand for bulk annuity deals as more and more trustees and sponsoring employers look to de-risk their DB pension schemes."
After Sea Containers declared itself insolvent in 2006, the Sea Containers 1990 Pension Scheme and the Sea Containers 1983 Pension Scheme triggered the regulator's first ever FSD, ordering it to provide financial support for the two schemes of its London-based UK subsidiary on 6 February 2008.
Following the withdrawal of an appeal to its tribunal, TPR confirmed that Sea Containers would be obliged to provide financial support for its schemes and approved the financial support arrangements in 2009.
Plans for the Sea containers 1990 Pension Scheme have not been announced.
Aviva Life & Pensions has concluded an £875m buy-in with its own staff pension scheme, following on from a similar transaction last year.
Just Group has completed a £74m pensioner buy-in with the UK pension scheme of a US-listed engineering business.
The Smiths Industries Pension Scheme has secured a £146m buy-in with Canada Life in its fourth bulk annuity and its sponsor’s tenth overall.
The Prudential Staff Pension Scheme has entered into a £3.7bn longevity swap with Pacific Life Re, insuring the longevity risk of over 20,000 pensioners.
The Baker Hughes (UK) Pension Plan has secured approximately £100m of liabilities through a buy-in with Just Group.