The Institute of Cancer Research (ICR) Pension Scheme has traded its gilts portfolio for a buy-in deal in with Pension Insurance Corporation (PIC) covering £30m of liabilities.
PIC said the ICR scheme trustees completed the deal as part of their investment strategy.
ICR Pension Scheme trustee chairman John Roberts said: “Like many organisations, we were facing potentially significant financial liabilities from our pension scheme as our retiring staff lived longer and drew their pensions over a longer period.
“We’re therefore very pleased to have insured ourselves against those financial risks, and to have controlled the costs of doing so by taking advantage of the high value of gilts.”
PIC senior actuary Matt Barnes explained: “Given the current value of gilts, a buy-in will typically not result in a significant additional contribution cost for the sponsor. A large number of schemes are currently looking at the gilts-for-annuities trade.”
The trustees and the ICR were advised by Punter Southall and Towers Watson, respectively.
Towers Watson senior consultant James Staveley-Wadham said: “An unusual feature of this deal was that all parties agreed in principle and chose their preferred provider, but the funding strain was too big. Hence a monitoring mechanism was put in place, and when markets moved such that the price was acceptable to ICRPS and ICR the deal was done.”
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