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Aon Minet pension scheme enters into buy-in agreement

11 July 2012

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The trustees of the Aon Minet Pension Scheme have signed a second pension insurance buy-in agreement this week with the insurance company Pension Insurance Corporation (PIC).

The transaction covers a tranche of pensioners representing around 25% of the scheme's pensioner liabilities, with the premium being roughly £100m.

The Aon Minet pension scheme, which according to data held by Pension Funds Online has around 2500 members, dates from the period when insurance broker Aon's bought its smaller rival Minet in 1997.

The buy-in agreement is evidence of the scheme's move to further de-risk through securing the liabilities and follows a previous pensioner buy-in agreed upon in 2009.

Jay Shah, co-head of business origination at the Pension Corporation said: "With this transaction the trustees have insured benefits for a tranche of pensioners with PIC, which means that these liabilities are fully hedged." He added that the firm sees more and more trustees exchanging scheme assets such as gilts and cash for a matching investment in the form of an insurance buy-in policy as "pricing terms remain relatively attractive for schemes holding well matched assets".

Chairman of trustees of the scheme, Robert Dickinson CBE said: "We received excellent advice from Aon Hewitt, and the PIC team were responsive to our specific needs. We are very pleased to have been able to conclude this transaction with them."

Paul Belok, principal at Aon Hewitt, said: "We worked closely with the trustees to help them progress their de-risking strategy. To achieve this we ran a competitive process to assess the bulk annuity market for the best terms and structure and the resulting solution will further enhance members' security."

First published 11.07.2012