The Alitalia Airlines Pension and Assurance Scheme, London, bought a £53 million ($76.8 million) bulk annuity from Pension Insurance Corp. to insure the pension benefits of participants in the bankrupt airline's U.K. defined benefit plan.
The buy-in deal effectively boosts benefits for members by keeping the plan out of the U.K.'s Pension Protection Fund, a fund spokesman explained. The buy-in will provide a 10% boost over PPF-level benefits.
The pension fund had a deficit of £22 million as of Jan. 21. Plan trustees are trying to recover the money from the airline's Italian administrators. If recovered, the money would be added to the bulk annuity to boost benefits.
Investment consultant Barnett Waddingham is the plan's administrator and advised on the buy-in deal.