Somerfield Pension Scheme, Manchester, England, insured £425 million ($540 million) in liabilities through a buy-in with Pension Insurance Corp., Tom Scott, principal consultant at Aon and lead adviser on the deal, said in telephone interview.
The deal is Somerfield Pension Scheme's first buy-in, through which the fund covered the vast majority of pension liabilities.
The timing of the deal was a combination of the pension fund being in a "healthy position" and "attractive market pricing," Mr. Scott said.
Eversheds Sutherland provided legal advice and Mercer provided investment advice to the £1 billion pension fund, one of several sponsored by the food retailer Co-operative Group. PIC was advised by law-firm Herbert Smith Freehills.
"This buy-in is the result of many years of hard work as we pursued a long-term derisking strategy and I am pleased that the co-op and trustee have been able to work together to complete it in what have been volatile market conditions," Chris Martin, executive chairman of the fund's independent trustee, Independent Trustee Services, said in a news release.
"The result further increases the security of scheme members' benefits," Mr. Martin said, adding the PIC won the contract based on its ability to "complete the transaction in these markets" and its track record.