IMI plc and PIC execute another £250 million of pension de-risking for the IMI 2014 Deferred Fund, insuring in total £800 million of IMI liabilities

21 January 2022

Pension Insurance Corporation plc (“PIC”), a specialist insurer of defined benefit pension funds, has signed another partial buy-in with the Trustee of the IMI 2014 Deferred Fund (“the Fund”), covering £250 million of liabilities for about 1,200 Fund members, 95% of which are deferred members (members yet to start drawing their pension).

This transaction, executed in December 2021, takes the total liabilities sponsored by IMI plc (“IMI”) which have been insured by PIC to £800 million since 2016, through five partial buy-in transactions. IMI plc and the Fund were advised by PwC as lead transaction advisors, while the Fund was further advised by Willis Towers Watson as the actuarial advisors, Aon as investment advisors, and SPB as legal advisors.

IMI plc is a British-based engineering company headquartered in Birmingham, England. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

Duncan Brown, Group Pensions Manager at IMI plc and Secretary to the Trustee of the Fund, said: “This transaction is huge step in the direction of our long-term de-risking objective of fully insuring our pension obligations. We have now insured close to 80% of our UK defined benefit pension obligations over the last decade, securing the benefits for our members and substantially eliminating uncertainty around costs and cash for IMI plc as corporate sponsor of these obligations. We’re delighted that we have been able to complete another transaction with PIC, who have once again been flexible and innovative in their approach. We have consistently been impressed with PIC’s focus on customer service.”

Tristan Walker-Buckton, Head of Pricing at PIC, said: “IMI is a client that we have worked very closely with over several years and we are naturally proud to have been able to complete this transaction with them. A key aspect of this transaction is the very high proportion of deferred members and insuring them required close collaboration with the Trustee. IMI are a very good example of how a first-class de-risking exercise should be run and the Trustee should be congratulated on the execution of their plan.”

Swapnil Katkar, Pension Solutions Advisor at PwC UK, said “We were pleased to be able to support IMI plc and the Trustee in structuring and executing this de-risking transaction despite the disruptions of the pandemic. Even though the insured liabilities were almost entirely made up of deferred members which are typically more challenging to insure, and long dated corporate credit spreads in the market were at historically low levels, we were able to work with PIC and other participating bulk insurance providers to ensure competitive pricing and suitable terms could be incorporated in the transaction.”

Source: PIC
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