The Merchant Navy Officers Pension Fund (MNOPF) has purchased a bulk annuity insurance policy with insurance provider Rothesay Life, securing approximately £680m of members' pension benefits in its Old Section.

The insurance policy now fully covers all pension entitlements from the Old Section of the fund, which consists of around 40,000 members.

"Improving the funding position from a little over 80% in 2009 to full funding today, and completing this transaction, have been a tremendous achievement in these very difficult markets," said MNOPF chief executive Andrew Waring.

Waring added that the transaction was a "very significant moment" for the fund and its members.

Peter McEwen, MNOPF chairman, said: "Our top priority in negotiating this arrangement has been to secure the benefits of all our members. This move not only achieves that goal, it also enables us successfully to manage the risks faced by the fund as a whole, which is good news for employers too."

The Old Section of the fund was closed in 1978. In 2009 and 2010 around half of the Old Section's liabilities were secured through policies with Lucida plc.

"We are delighted that the Trustee of the MNOPF has chosen to insure the remaining part of the pension fund with Rothesay Life and look forward to working closely with them. We are in dialogue with an increasing number of pension schemes seeking to execute bulk annuities when market conditions are right," said Rothesay Life's chief executive, Addy Loudiadis.

Loudiadis added: "All pension schemes should consider adopting this approach, particularly in volatile markets, as a well-timed transaction can deliver real value."


First published 13.12.2012

monique_simpson@wilmington.co.uk