Liberty International insures pension benefits in GBP61m buy-out deal

Property company Liberty International has insured its pension benefits in a £61 million buy-out deal with the Pensions Insurance Corporation.

The move, announced by the Liberty International Group Retirement Benefit Scheme, will see it insure its defined benefit (DB) obligations in a deal comprising £46 million in scheme assets and a £15 million additional contribution from the company.

The transaction was arranged by Mercer, which acted as a broker, and actuarial and investment adviser to the trustees.

Akash Rooprai, lead broker for the transaction and a principal at Mercer, said: “This is another example of a FTSE100 company that has implemented a successful pension de-risking strategy in relation to its defined benefit obligations. It demonstrates how purchasing insurance can enable companies to focus on their primary business objectives rather than the management of increasingly legacy pension obligations. I believe we will see this market continue to grow in 2010.”

Ian Durant, Liberty International’s finance director, said “We are pleased the trustees, together with their advisers Mercer, have successfully completed this transaction. Liberty International has protected the members’ interests while removing the uncertainty associated with the funding of defined benefit schemes at an acceptable cost to the company.”

For more articles on pensions