Aggregate Industries' two largest pension schemes have entered into
insurance transactions to transfer risk to Pension Insurance
Corporation (PIC), a provider of risk management solutions to
defined-benefit pension funds.
In one transaction, a £210m insurance policy was purchased by the
Aggregate Industries' pension plan to meet all future payments for
pensions in payment as at 30 April 2009. In the second, a £95m
insurance policy was bought by the Foster Yeoman retirement plan 2000
to insure the benefits for all members. It is expected that in due
course the plan will be wound up, removing any further obligation on
the company.
Ian McGown, head of pensions and benefits at Aggregate Industries,
said PIC was selected ahead of several other insurers. "We are
extremely pleased to have completed two complex transactions
simultaneously and in such a short period," he stressed, adding, "The
transactions bring further increased security to members' benefits for
the long-term."
Michael Berg, partner at Lane Clark & Peacock, which acted as
lead adviser to the company and the trustees of the two pension schemes
on the transactions, said: "We are working with a number of pension
schemes and companies to explore de-risking transactions and expect
2010 to be a very successful year for the pensions risk transfer
market."