MNOPF completed its first pension risk transfer deal in 2009, when the pension fund insured £500 million in liabilities through a buy-in with Lucida. A £100 million buy-in transaction in 2010, also with Lucida, followed the deal. Lucida was acquired by Legal & General in 2013.
Additionally, the fund in 2012 secured a £1.3 billion buy-in, which in 2015 became a buyout, insuring all of the liabilities of MNOPF's Old Section. A £500 million buy-in with L&G in 2017 followed that deal.
"This buy-in enables us to more effectively manage the risks faced by the fund as a whole, providing greater certainty to members that their benefits will continue to be paid in full from the fund," said Rory Murphy, chairman of MNOPF, in a news release Monday. "It is also good news for employers in the maritime and shipping industry, who have already saved many millions in deficit contributions over recent years as a result of our improved funding position."
Willis Towers Watson and law firm Baker McKenzie advised MNOPF on the current deal. PIC was advised by CMS Cameron McKenna Nabarro Olswang.
In November 2019, another U.K. pension fund converted £750 million in longevity risk into a buy-in contract also with PIC. The £2.2 billion Scottish Hydro-Electric Pension Scheme, Perth, Scotland, had originally covered £800 million in longevity swap through a deal with Legal & General in 2017.