ICI Pension Fund, London, entered into separate pension buy-in transactions with Legal & General and Prudential U.K. and Europe to insure an aggregate £3.6 billion ($6 billion) of pension liabilities through bulk annuity deals, said a spokesman for Akzo Nobel, the sponsor of the pension fund.
The spokesman said the two agreements cover about one-third of the ICI Pension Fund liabilities, or about a quarter of Akzo Nobel's pension liabilities. Akzo Nobel acquired Imperial Chemical Industries in 2008.
The deal with L&G covers £3 billion of pension liabilities, in the largest-ever bulk annuity policy arranged by a U.K. pension fund, according to a news release from L&G.
“Investment in these buy-in policies builds on the fund's strong derisking foundations,” said Heath Mottram, CEO of the ICI Pension Fund, in the L&G news release. “The transactions are the result of significant work by the trustee over the last six months including a thorough selection process and negotiation of competitive pricing and terms.”
The remaining £600 million buy-in with Prudential covers about 6% of ICI's U.K. defined benefit pension liabilities, which total about £10 billion, according to a news release issued by Prudential.
ICI Pension Fund had £9.1 billion of assets as of March 31, 2013, according to its most recently published funding statement.
Akzo Nobel was advised by Towers Watson. Lane Clark & Peacock was lead adviser to ICI Pensions Trustee.
