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Pension Risk Transfer

600 Group shifts £201 million of pension liabilities to PIC in buyout

The 600 Group, Heckmondwike, England, insured £201 million ($267 million) of pension liabilities in a buyout with Pension Insurance Corp. on behalf of its U.K. defined benefit fund, said the manufacturer of industrial products in a regulatory announcement Tuesday.

The buyout was the pension fund's first and only risk transfer deal, the spokesman said, adding the assets of the pension fund were in line with its liabilities and close to 100% funded.

However, the buyout amount was greater than the liabilities and as a result of the transaction, the remaining surplus of between £3 million and £4 million will be payable to the company, the spokesman said.

"For some time, the trustee of our U.K. pension fund and the company have been working towards a permanent transfer of future liability to achieve two goals: firstly, to better secure the benefits to be paid to the retirees and fund (participants); and secondly, to relieve the company of the disproportionate liability of such a large fund," said Paul Dupee, executive chairman, in a news release.

As of Sept. 30, the pension fund had a surplus at £12.2 million.