Old British Steel Pension Scheme, Glasgow, Scotland, has agreed to a £2 billion ($2.6 billion) buy-in with Pension Insurance Corp. and is expected to complete a full buyout next year, said a spokesman for Open Trustees, the pension fund's trustee.
The £2 billion pension fund will also exit its Pension Protection Fund assessment period. It entered the assessment period for entry into the £36 billion lifeboat fund in March 2018 following a restructuring of the U.K. operations of sponsoring employer Tata Steel U.K. The pension fund comprises British Steel employees who chose not to transfer to the £10.6 billion New British Steel Pension Scheme, Glasgow, in 2018.
The buy-in deal covers all participants in the pension fund and will be converted into a buyout over the coming year. The buyout will also be with PIC, the spokesman said.
"When we were first appointed as trustee of the OBSPS, we anticipated that the PPF would assume responsibility for OBSPS," said Jonathan Hazlett, managing director of Open Trustees, in a news release. "However, better than expected funding levels coupled with the adoption of scheme-specific mortality assumptions have meant that a windup outside of the PPF became possible."
Barnett Waddingham advised the OBSPS on the transaction.
