PIC insures £1 billion of Co-op pension liabilities

London, 19 February 2020 – Pension Insurance Corporation plc (“PIC”), a specialist insurer of defined benefit pension funds, has concluded a £1 billion pension insurance buy-in with the Trustee of the Co-operative Pension Scheme (“the Scheme”), guaranteeing the pension benefits of approximately 7,000 scheme members in the Co-op Section of the Scheme. This buy-in will mean that while the Trustee retains responsibility for paying the Scheme’s pensioners, it will receive regular payments from PIC to fund these pension payments into the future. The transaction was led by Aon, with the Trustee receiving legal advice from Linklaters and investment advice from Mercer. PIC was advised by Herbert Smith Freehills.

The Co-op is one of the world’s largest consumer co-ops, owned by millions of members. It has the UK’s fifth biggest food retailer, the UK’s number one funeral services provider, a major general insurance business, and a developing legal services business.

Chris Martin of Independent Trustee Services Limited, the chair of the Co-operative Pension Scheme’s Trustee, said: “This buy-in is another step in improving member security as the Trustee continues to follow its long-term de-risking strategy, and is a positive result for scheme members, the Trustee and the Co-op. I want to thank PIC for their proactive and flexible approach to helping us complete this transaction. I’d also like to thank the Co-op team and our advisers Aon, Linklaters and Mercer.”

Gary Dewin, Director of Reward for the Co-op, said: “Our Pace pension scheme is one of the strongest in the UK and highly valued by its members.  The purchase of Pace’s second significant insurance contract further protects members by strengthening the scheme’s position.”

Mitul Magudia, Head of Business Development at PIC, said: “This is the second transaction PIC has completed with a pension scheme sponsored by the Co-op, following our buy-in of the Somerfield Pension Scheme last year. This transaction speaks to the strength of our relationship and a common outlook on customer care and pensioner welfare.”

Stephen Purves, Partner in Aon's Risk Settlement Group said: “This is yet more good news for the Scheme and represents a fantastic achievement in what has been an exceptionally busy bulk annuity market in recent months. We are very pleased to have supported the Joint Working Group of the Trustee and Co-op by completing this bulk annuity transaction with PIC.”

Emma Hudson, Principal in Mercer's Investment team, said: “As long-term advisers to the Trustee, we are delighted to have helped the Scheme to complete this next step on its de-risking journey.”

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Notes to Editors:

For further information please contact:

PIC                                                    
Jeremy Apfel                         
+44 (0)20 7105 2140 
apfel@pensioncorporation.com

About Pension Insurance Corporation

The purpose of PIC is to pay the pensions of its current and future policyholders. PIC provides secure and stable retirement incomes through leading customer service, comprehensive risk management and excellence in asset and liability management. At 31 December 2019, PIC had insured 225,000 pension scheme members and had £40.9 billion in financial investments, accumulated through the provision of tailored pension insurance buyouts and buy-ins to the trustees and sponsors of U.K. defined benefit pension schemes. Clients include FTSE 100 companies, multinationals and the public sector. PIC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority (FRN 454345). For further information please visit www.pensioncorporation.com