CAA clears £60m of pension risk

23 Jul 2018

The UK’s aviation regulator has completed its second multi-million pound buy-in with Pension Insurance Corporation (PIC) in 18 months.

In this latest deal, the Civil Aviation Authority (CAA), which also provides air traffic services, de-risks £60m of final salary scheme liabilities.

This follows the £90m PIC insured in January 2017 as part of a plan to de-risk the authority’s entire defined benefit (DB) pension scheme.

These deals take the value of CAA’s pension scheme liabilities that have been insured to £1.7bn.

The CAA has joined several other sponsoring employers in taking advantage of attractive pricing in the buy-in market. A record de-risking year in the UK is expected, driven by competition among insurers and schemes looking to lock-in their gains from a strong run in equities.

Earlier in July, one consultant estimated that the deal-flow for buy-ins and buy-outs could top £18bn this year, smashing the £13.4bn record set in 2014.

So far this year PIC has insured more than £3.2bn of liabilities for DB pension schemes, almost half of which is a £1.3bn deal for tech giant Siemens.

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