Merchant Navy Officers Pension Fund, Surrey, England, entered into a £25 million ($43 million) deal with Rothesay Life to complete a £1.3 billion pension buyout that started in 2009 to transfer 100% of the liabilities of its Old Section pension plan, said a spokeswoman for the pension fund.
The pension fund will be formally wound up in the next few weeks. It closed in 1978.
The final tranche saw MNOPF secure a deal with Rothesay Life to cover £25 million of liabilities to improve the benefits that each member receives. Members will have a 2.2% pension increase through their policies.
This transaction follows a £680 million bulk annuity deal with Rothesay Life in 2012, and two deals covering a total £600 million of liabilities with Lucida in 2009 and 2010. Lucida was subsequently acquired by Legal & General.
“Today's announcement is good news for our members,” said Peter McEwen, chairman of the MNOPF, in a news release from the pension fund. “It means that certainty and security over pension benefits have now been extended in full to all benefits of the Old Section through the insurance arrangements that are in place.”
Pension fund CEO Andrew Waring added that the Old Section's funding position was just over 80% in 2009, and it is now fully funded. “This latest transaction marks a very significant moment for the fund. It comes as a result of the determination of the trustee to minimize the period between buy-in and buyout and so provide the maximum uplift to members,” Mr. Waring said in the news release.
