Case study: The Metal Box Pension Scheme - £2.2bn full buyout in 2021

Background:

• after completing a number of member choices exercises including an enhanced transfer value process and pension increase exchanges, alongside an investment strategy that gave good returns and equity protection, the Scheme was in a position to afford a buyout
• however, there were several strategic priorities that needed to be met before a transaction could be complete

Goal:

• attractive pricing with investment risk removed during exclusivity
• comprehensive residual risks cover to remove data, benefits, missing beneficiaries and legal risks
• company to achieve settlement of the Scheme’s liabilities in their balance sheet prior to the end of Q4 2021 which presented challenging timescales

Delivering:

• PIC was able to immunise the Scheme’s investment risk by taking the Scheme’s assets as an in-specie payment and locking into their assets during the exclusivity period
• PIC carried out data due diligence, with the accelerated timescales of six to eight weeks which ensured the Scheme was able to purchase the desired residual risk cover at attractive pricing
• worked collaboratively with the Scheme’s administrators to enable us to transition quickly from buy-in to buyout exactly a month later to ensure the settlement of the liabilities in 2021

Outcome:

• this was one of the largest transactions in the last 10 years and forms a blueprint for other large schemes looking to achieve similar objectives in the future