Partner insight: Why the Metal Box buyout forms a blueprint for large pension schemes

Mitul Magudia and Peter Rennalls talk about the largest bulk annuity transaction of 2021 and the lessons it offers for other schemes

clock • 1 min read
Partner insight: Why the Metal Box buyout forms a blueprint for large pension schemes

With liabilities totalling £2.2bn, the Metal Box Pension Scheme buyout was one of the largest in the bulk annuity market over the last 10 years.

We worked to quite challenging timescales. The trustee and their advisers engaged PIC and the insurance market approximately 12 months ago, but the majority of the activity was undertaken in the last three to four months once the Trustees had selected PIC as their preferred insurer.

Over that period, we had to set up a new arrangement to administer the benefits after the issuance of the deed poll, make sure we were operationally ready for both the buy in and the buy out, undertake due diligence, and work on the policy documents, deed poll and supporting contracts.

As schemes continue to mature across the UK, they become more and more focused on pensioner members and as scheme funding levels continue to increase, we think buyouts will continue to be more and more prevalent.

This kind of deed-poll approach with an extended exclusivity phase, allowing for assets and operational and legal aspects to be considered in detail, is likely to be the way that they are undertaken.

 

For more on the Metal Box Pension Scheme buyout, watch our exclusive 3 Minutes With interview with Mitul Magudia and Peter Rennalls here.

 

This article was funded by Pension Insurance Corporation.

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