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Pension Risk Transfer

Commerzbank taps PIC for $1.6 billion pension buy-in

Commerzbank insured $1.6 billion in liabilities for its Dresdner Kleinwort Pension Plan through a buy-in with Pension Insurance Corp.

Commerzbank, London, insured 1.2 billion ($1.6 billion) in liabilities for its Dresdner Kleinwort Pension Plan through a buy-in with Pension Insurance Corp., Charlie Finch, partner at Lane Clark & Peacock and adviser on the deal, said Tuesday in a telephone interview.

The transaction covered the liabilities in two sections of the plan: a 900 million defined benefit section; and a 300 million defined contribution section with a DB underpin.

Commerzbank saw the risk transfer deal as a chance to fully settle the occupational pension fund of Dresdner Bank, which it acquired in December 2009, Mr. Finch said.

The sponsor wanted to close the pension fund and simplify the pension arrangements, he said. Instead of being transferred to a new DC arrangement, participants in the DC section were able to have liabilities insured with PIC alongside the participants in the DB fund.

"This transaction required a high level of creative thinking by our advisers, LCP, in designing a structure combining the participant choice program with the insurance transaction," David Curtis, director at the independent trustee to the plan, LawDeb Pension Trustees, said in a news release.

In addition to LCP, Linklaters provided legal advice.

The asset size of the Dresdner Kleinwort Pension Plan could not immediately be learned.