PIC and Siemens enter £300m pension insurance and reinsurance contract

London, 7 April 2016 – Pension Insurance Corporation (“PIC”), a specialist insurer of defined benefit pension funds, has concluded a £300 million pension insurance buy-in with the Trustees of the VA Tech UK Pension Scheme ("the Scheme") together with a retrocession to the captive reinsurer (Risicom Rückversicherung Aktiengesellschaft) of the parent company, Siemens Aktiengesellschaft.

Key features of the transaction:
- Two tranches of pension liabilities insured; the first £100 million of liabilities insured in 2013 by PIC, followed by £200m in December 2015
- Trustees benefit by securing the Scheme’s liabilities with a UK insurance company
- Collaboration with Siemens’ captive reinsurer, Risicom, whereby a significant proportion of the insured liabilities are reinsured by PIC to Risicom
- The collaboration with PIC enables Siemens to manage centrally pension risks and liabilities in different pension schemes through their captive reinsurer
- Covers the liabilities of about 1500 Scheme members
- Cross-border complications addressed

The VA Tech UK Pension Scheme provides pensions for UK employees of the VA Tech Transmission and Distribution business acquired by Siemens in 2006 and now forming part of one of the UK’s leading suppliers of High Voltage Switchgear and Substation Services.

John Smith, Head of Pensions at Siemens plc, said: “Siemens is the sponsor of several DB schemes in the UK. There is an overall aim to de-risk the schemes in the medium term. Siemens’ Pension Captive Program, in collaboration with PIC, is an important and innovative
part of the de-risking strategies which works on a local level as well as at the Siemens group level.”

Eric Hurrell, chair of trustees, VA Tech UK Pension Scheme, said: “This arrangement provides greater security for our members through PIC, a highly regarded bulk annuity insurer, whilst facilitating Siemens’ broader strategy. We were helped along the way with clear advice from Mercer and Bond Dickinson through the complexities of the structure.”

Jay Shah, Head of Origination at PIC, said: “Multi-national companies are taking a holistic view of their various pension liabilities across the globe as part of their efforts to de-risk and settle these liabilities. Siemens have taken this a step further in this innovative captive reinsurance arrangement. We are proud to have collaborated with Siemens in this transaction.”

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Notes to Editors:

For further information please contact:

Pension Insurance Corporation

Jeremy Apfel +44 20 7105 2140
apfel@pensioncorporation.com 

Teneo Strategy

Anthony Silverman +44 (0)20 7240 2486
Anthony.Silverman@teneostrategy.com

About Pension Insurance Corporation
Pension Insurance Corporation plc ("PIC") provides tailored pension insurance buyouts and buy-ins to the trustees and sponsors of UK defined benefit pension funds. PIC brings safety and security to scheme members' benefits through innovative, bespoke insurance solutions, which include deferred premiums and the use of company assets as part payment. At year end 2015 PIC had £16.6bn in assets and had insured 132,100 pension fund members. Clients include FTSE 100 companies, multinationals and the public sector. PIC is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority and PRA (FRN 454345). For further information please visit www.pensioncorporation.com

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