Aon Retirement Plan, Surrey, England, completed a £900 million ($1.3 billion) pension buy-in with Pension Insurance Corp., covering the majority of liabilities across two sections of the hybrid plan.
A spokesman for the sponsoring employer, Aon, said the pension plan has more than £3 billion of assets, and that the buy-in covered all retirees of the two sections.
PIC has already completed two buy-ins with a separate Aon-sponsored pension fund, the Aon Minet Pension Scheme, Surrey, totaling £310 million.
“We are very pleased to have been able to conclude this transaction at a time of considerable market volatility,” said David Burton, independent chairman of trustees for the Aon Retirement Plan, in a news release by PIC. “By securing this buy-in asset, we have taken a significant step in our long-term derisking plan, following a smaller transaction with another insurer last December.” Further details could not be learned by press time.
“This was the first sizable pension insurance transaction under the new Solvency II regime, showing that large buy-ins priced under Solvency II remain an attractive option for trustees,” said Matt Barnes, senior actuary at PIC, in the news release.
European rules under Solvency II came into play Jan. 1, and they put new capital requirements on insurers.
The trustees of the plan were advised on the transaction by Aon Hewitt. CMS Cameron McKenna provided legal advice. The transaction was primarily funded with gilts, the release said.