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Buy-in deal announced for Cookson Group pension plan

19 July 2012

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The Cookson Group pension plan agreed upon a £320m pension insurance buy-in with the Pension Insurance Corporation (PIC) it was announced.

Aon Hewitt advised the trustee of the scheme on the deal which covers some 60% of the scheme's pensioner liabilities in the UK with an insurance premium of around £320m met from existing assets of the plan.

The transaction covers the fund's liabilities in relation to over 3,300 pensioners. According to data held by Pension Funds Online, the Cookson pension plan had assets worth £487.5m on 31 December 2011. 

The firm is one of the world's largest suppliers of consumables used mainly in the production of steel, foundry castings and electronics.

Paul Belok, principal in Aon Hewitt's risk settlement group, said: "After a relatively quiet start to 2012 - following a particularly strong end to 2011 - this is the biggest transaction of the year in the bulk annuity market.  We are aware of a reasonable level of activity currently taking place and can expect to see some more sizeable deals by the end of the calendar year. In particular, we are seeing interest from schemes looking to take advantage of the currently attractive bulk annuity pricing relative to gilt yields."

Speaking to StockMarketWire, Mike Butterworth, Cookson's group finance director, said: "Following the successful conclusion of an enhanced transfer value offer earlier this year, which reduced significantly the UK plan's deferred member liabilities, this buy-in represents a further demonstration of the company's intention to work with the trustee to de-risk the UK plan in a managed way."


First published 19.07.2012