SR Technics UK has completed a pension insurance buy-out that covers £200 million of pension liabilities and 2,500 members.
Its defined benefit (DB) pension scheme was formerly in the Pension Protection Fund (PPF) assessment process. The transaction will enable the trustees of the scheme to grant members an uplift in excess of the PPF capped benefits.
The provider of technical solutions for airlines entered into a compromise agreement with the trustees on their liability towards the scheme and obtained clearance from The Pensions Regulator.
The trustees were advised by Mercer and Wragge and Co.
Jay Shah, co-head of business origination at Pension Insurance Corporation, which performed the buyout, said: “Due to the nature of the PPF’s assessment period, this was a lengthy transaction, but one which now secures benefits in excess of the PPF minimum.
“The current economic climate, combined with ultra-low gilt yields, means that some pension schemes are falling into the PPF due to the additional strain on their [employer] sponsor.
“We are delighted to be able to help trustees in the assessment period provide a greater level of pension benefit in these circumstances than they would otherwise receive. We do expect further buyouts in 2013 as schemes move through this process.”
Stuart Faloon, principal at Mercer, added: “This was a complex and challenging transaction.
“Key priorities were to ensure transparency in the contract terms and protection against future uncertainty and risks.
“By working collaboratively in a flexible and constructive manner, a successful outcome was achieved for all parties.”