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Pension Funds

Mizuho Capital Markets enters into buyout for DB portion of hybrid plan

Mizuho Capital Markets U.K., London, insured 10 million ($13 million) in pension liabilities of its 25 million U.K. hybrid plan via a buyout, said David Barratt, senior buyout consultant at JLT Employee Benefits, which advised MCM on the deal.

The transaction was conducted with Legal & General to settle the MCM pension fund’s liabilities before the derivatives firm starts a reorganization.

The hybrid plan’s defined benefit portion provides a guaranteed minimum pension to participants who joined the plan before 1997. Employees hired afterward were enrolled in a defined contribution plan.

During the buyout, participants were offered a deferred annuity or an option to transfer out of the plan to pursue their own pension arrangements with individually chosen insurers. Mr. Barratt said 55% of participants from a 200-participant section of MCM’s plan chose the transfer. Remaining participants will receive a deferred annuity for their guaranteed minimum benefit through an annuity with Legal & General and a defined contribution account with the company’s newer plan. Mr. Barratt could not provide the size of the DC plan.

The plan had initially undergone a buy-in; a few weeks later a full buyout was conducted.

Toyomu Chihaya, managing director, MCM U.K., said in a news release: “We are delighted with the results we have achieved for both MCM and the scheme membership in ensuring all liabilities are settled in full.”