The trustees of GeoPost UK Limited Pension Scheme have completed a £30m buy-in with Pension Insurance Corporation (PIC).

The deal covers 645 members of the £105m scheme.

A tailored risk management solution was developed for the trustees by introducing the concept of insuring without a deflation floor, while allowing for the floor to be added back into the contract at a later date.

PIC said that this was the third such transaction that it has completed, but is the first to include new flexibility in the way future deflation protection costs will be defined and monitored, based on data from bespoke indices created for the deal.

Chairman of the trustees Rod Dawson said: "We were impressed with the solution which Hymans Robertson and PIC proposed, allowing us to lock down risk in the scheme.

"This transaction is another step in our on-going process to reduce the level of volatility and to increase the level of security of our members' benefits."

GeoPost is an express parcel delivery company covering more than 40 European countries and serving over 230 countries worldwide.

The trustees were advised by Hymans Robertson and Burges Salmon.

PIC senior actuary Matt Barnes said: "We are proud to have completed this transaction and are pleased to have been able to offer a flexible and tailored approach to meet the needs of the Trustees by allowing them to insure without a deflation floor.

"The fact that they are able to add the floor back in at a later date if they so wish addressed their concern that they would be unable to make the contract 'whole' when they wanted or needed to do so."

First published 05.03.2014

monique_simpson@wilmington.co.uk