RSA Group completes one of largest pension risk transfer deals in U.K.

RSA Group insured £6.5 billion ($7.8 billion) in liabilities for two defined benefit funds through a buy-in with Pension Insurance Corp. in one of the largest risk transfer transactions ever in the U.K. market.

RSA Group, which is a subsidiary of Intact Financial Corporation, covered liabilities for 40,000 plan participants of Sal Pension Scheme and the Royal Insurance Group Pension Scheme.

Intact contributed £500 million to the deal, which was accelerated by an improvement in pension fund funding levels due to rising gilt yields, a news release Monday said.

"The current market environment provides an excellent opportunity to remove U.K. pension exposure on IFC's balance sheet and maintain the security of the benefits of 40,000 RSA U.K. pension scheme members," Louis Marcotte, executive vice president and chief financial officer at Intact, said in the release.

Ray Cox, chairman of Sal Pension Scheme, and David Smith, chairman of Royal Insurance Group Pension Scheme, added in the release: "PIC were flexible in their approach, presenting innovative solutions to previously intractable problems, as well as proactively addressing issues which might have derailed the process."

Consultant Lane Clark and Peacock advised RSA and Intact on the buy-in, while law firm Slaughter and May provided legal advice.

Aon and Sackers advised the trustees of the Sal plan, and Willis Towers Watson and law firm DLA Piper advised the trustees of Royal Insurance plan.

Adviser Penfida provided covenant advice to both trustee boards.

A spokesman for RSA could not be reached for additional information.