The Metal Box Pension Scheme (“the Scheme”) has completed a £2.2bn all risks buyout with Pension Insurance Corporation (PIC)
This marks the end of a truly strategic journey that has lasted 11 years that has seen the Scheme move from having a solvency funding level of 67% to a position where all member benefits have been secured with PIC. Mercer have been the strategic advisers to the Scheme sponsor, Crown Packaging Manufacturing UK throughout this journey and were the lead advisers for the transaction with PIC. Some key points to draw out from the journey
As a result of the planning and preparation, and a robust insurer selection process, the Company and Trustee were able to select PIC as the preferred insurer for a buy-in transaction in October 2021, moving to full scheme buyout one month later.
The transaction with PIC provides a policy that secures the benefits for the Scheme’s 10,300 pensioners and 2,200 deferred pensioners. Furthermore, from the Company perspective, this was achieved in roughly one-third of the recovery plan period that came from the 2010 actuarial valuation, and at around half of the cost of the solvency deficit calculated at that time.
The buy-in and buy-out transaction with PIC required a number of innovative structural points to enable both Trustee and Company objectives to be met:
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