Citigroup has struck a £400m deal with Paternoster for the insurance firm to buyout the Powell Duffryn pension plan in what is reportedly the largest buyout deal so far this year.
Citigroup acquired Powell Duffryn in January, and the defined benefit plan, which is currently a portfolio investment of Citi, has approximately 7,000 members. The deal means that £400m of assets will be transferred to Paternoster, which will insure the plan’s liabilities.
Citi’s insurance and pensions team acted in an advisory capacity and implemented the inflation and interest rate hedging in connection with this transaction.
Nick Buckland, chairman and independent trustee of the Powell Duffryn pension plan, said: “Our primary concern has always been to insure as far as possible that our members’ benefits were secure and can be paid in full.”
Francis Fernandes, head of actuarial, insurance and pensions structured solutions group at Citi, said: “Now that the benefits have been secured with Paternoster, the trustees are finalising with Citi the interim arrangements for the [Powell Duffryn] plan prior to the issue of individual insurance policies to members. We foresee even stronger activity in the UK pension market and are stepping up our role in managing pension risk for sponsors and trustees.”