BAT agrees £400m buy-in
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The trustees of the British American Tobacco UK Pension Fund have completed another buy-in with Pension Insurance Corporation, insuring about £400m of liabilities.
This deal follows an initial buy-in covering £3.4bn of liabilities in May 2019, PIC’s largest to date. Three-quarters of the liabilities insured in the latest transaction relate to non-pensioners, according to PIC.
The BAT scheme has total liabilities of £4.1bn, and more than 10,000 members.
“Increasing the security of members’ benefits and reducing risk are top of the trustee’s agenda and this latest transaction is another step towards achieving our aims," said Graeme Munro, who chairs the British American Tobacco UK Pension Fund.
Partner and lead adviser to the trustee at LCP, Yadu Dashora, said: “The BAT Fund exemplifies the trend amongst pension schemes of establishing a strong foundation through an initial transaction that can be scaled up when attractive to secure further benefits, providing valuable optionality for the scheme without obligation. In this case, the Fund planned ahead and pre-agreed terms for this transaction alongside the first buy-in, which allowed it to secure attractive pricing for some of its remaining long-dated non-pensioner liabilities.”
Mitul Magudia, head of business development at PIC, added: “This transaction underlines the excellent relationship formed between the Fund and PIC. This relationship has been fostered over the last two years, with the aid of LCP, since our initial £3.4bn transaction in May 2019."
This deal follows an initial buy-in covering £3.4bn of liabilities in May 2019, PIC’s largest to date. Three-quarters of the liabilities insured in the latest transaction relate to non-pensioners, according to PIC.
The BAT scheme has total liabilities of £4.1bn, and more than 10,000 members.
“Increasing the security of members’ benefits and reducing risk are top of the trustee’s agenda and this latest transaction is another step towards achieving our aims," said Graeme Munro, who chairs the British American Tobacco UK Pension Fund.
Partner and lead adviser to the trustee at LCP, Yadu Dashora, said: “The BAT Fund exemplifies the trend amongst pension schemes of establishing a strong foundation through an initial transaction that can be scaled up when attractive to secure further benefits, providing valuable optionality for the scheme without obligation. In this case, the Fund planned ahead and pre-agreed terms for this transaction alongside the first buy-in, which allowed it to secure attractive pricing for some of its remaining long-dated non-pensioner liabilities.”
Mitul Magudia, head of business development at PIC, added: “This transaction underlines the excellent relationship formed between the Fund and PIC. This relationship has been fostered over the last two years, with the aid of LCP, since our initial £3.4bn transaction in May 2019."
