The Lloyd's Superannuation Fund (LSF) has completed a pension insurance buyout transaction covering £40m of liabilities with Pension Insurance Corporation.

The multi-employer defined benefit scheme was established in 1929, and its members are employees and former employees of some of the companies associated with the Lloyd's of London insurance market.

Barnett Waddingham advised the trustee of the scheme on the deal.

Eric Stobart, chairman, LSF Trustee, said: "The LSF trustee had clear objectives for this exercise, particularly around minimising risk. As a last man standing scheme any shortfall between the S75 premium and the buy-out price would have to be met from the remaining scheme assets.

"Once the exiting employer agreed to work with the Trustee on this, we were pleased that the hard work and innovative approaches of Barnett Waddingham and Pension Insurance Corporation meant we were able to agree a fixed premium mechanism within the short timescale available.

"The Trustee was surprised that such a mechanism had not been used before, and expects that other schemes may wish to consider this in future."

Pension Insurance Corporation senior actuary Matt Barnes said: "Pension Insurance Corporation is committed to innovation in the bulk annuity market and we were pleased to have this opportunity to work with the LSF Trustee and Barnett Waddingham to tailor a solution to meet the specific requirements of this unusual transaction."

First published 31.10.2013

monique_simpson@wilmington.co.uk