AIB Group insures liabilities of U.K. pension fund with L&G

AIB Group U.K. Pension Scheme, London, insured £61 million ($86 million) in liabilities through the conversion of an existing policy into a buy-in with Legal & General Group, a spokesman at Mercer, adviser on the deal, confirmed.

The deal converted part of a £250 million assured payment policy, which secured investment-related risks for the finanical services firm's pension fund with L&G in 2019. Under the policy L&G provided protection against changes to asset yields, interest rates and inflation to the plan.

Through the conversion, additional risks such as longevity were also passed to L&G.

The transaction covered both retirees and participants who are yet to retire. The spokesman confirmed that the intention is to convert the remainder of the APP, but did not comment on the timeline.

"This transaction represents further substantial progress in derisking the scheme and improving the security of members benefits. I would like to thank our advisers for their constructive input and advice throughout this process," Norbert Bannon, chairman of the trustees at the AIB Group U.K.Pension Scheme, said in a news release.

Andrew Ward, partner and head of risk transfer at Mercer, added in an emailed comment: "We were delighted to support the trustees on this important next stage of their journey which further improves the security of members benefits. It is also a great example of how trustees and sponsors can embrace the expanding range of derisking and end-game options to achieve better outcomes which suit their own particular circumstances."

The trustees were also advised on the transaction by law firm Sacker & Partners.