Case study: Old British Steel Pension Scheme - £2 billion PPF full buyout in 2020

Background:

• the Old British Steel Pension Scheme entered into PPF assessment in 2018. However, there were several strategic priorities that needed to be met before a transaction could be complete

Goal:

• the Trustee had several key objectives:
  • provide security and certainty to members following a long period of uncertainty, securing benefits at PPF level or above with an insurer so the Scheme would not end up in the PPF
  • protect members against adverse market movements during exclusivity to provide certainty that the level benefits secured remained above PPF levels
  • flexibility to reshape the benefits post transaction on an individual member basis

Delivering:

• secured benefits above PPF levels providing certainty and security to members
• removed investment risk during exclusivity to avoid funding position deteriorating before completion
• provided flexibility where required, for example the ability for the Trustee to reshape the benefits post transaction, to get the best outcome for the members

Outcome:

• this was one of the largest PPF buy-outs, which illustrates that with a robust process in place and clear objectives and collaboration between all working parties, the best outcome for members can be reached during uncertain times