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

  • In 2010, the Scheme had a solvency deficit of around £0.7bn and a recovery plan that extended almost 30 years.
  • By working collaboratively with the Trustee and Company, several de-risking projects have been implemented providing choice and flexibility to members, supported by appropriate financial advice. The de-risking steps included phased pension increase exchange exercises and enhanced transfer value exercises.
  • Separation of the defined contribution assets into a MasterTrust, preparing the Scheme for future buyout.
  • Use of investment protection strategies to deliver the right balance between risk and return.
  • GMP equalisation has been implemented for both pensioner and deferred members using method D2 (conversion) as set out in the 2018 Lloyds judgement.
  • Early engagement with legal due diligence to identify potential issues and smooth the later stages of any buyout transaction.
  • Careful structuring of the transaction to deal with a rump of illiquid assets.

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 Insurance Transaction: Key Features

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:

  • Initial market testing to identify that a transaction at an attractive price was feasible in 2021.
  • A robust insurance market approach, led by Mercer, with strong collaboration between Trustee and Company advisors throughout the project – maximising insurer appetite for this landmark transaction
  • Use of a ‘’Buyers Report’’ to allow all quoting insurers to assess Residual Risk cover at an early stage – this provided greater certainty when selecting an insurer and time to address any issues.
  • An agreed price lock to match the Scheme assets – providing certainty to the deal economics during the pre buy-in preparation period
  • Structuring an asset solution to deal with a rump of illiquid assets
  • Agreeing a one month period to full buyout from buy-in, through:
    –Completion of GMP conversion and full member data reconciliation in advance of the buy-in to enable a single premium transaction with no subsequent price adjustments
    –Agreement for the insurer to use the existing scheme administrators after buyout to ensure a consistent member experience
Adrian Hartshorn, FIA
Senior Partner


020 7178 7261

“We are delighted to have advised the Company taking them on a strategic de-risking journey which has now reached a conclusion through a full scheme buy-in, soon to be converted to a buy-out, with Pension Insurance Corporation. Throughout the journey we have offered choice to members, sought to build and protect the Scheme's financial position and carefully planned ahead to allow risks to be mitigated.“

Ben Stone, FIA


07557 031 694

“The extensive planning work together with a clear engagement strategy when approaching insurers, resulted in this significant transaction being completed through a smooth process to deliver security for members and a high degree of price certainty for the Company.”

Sidonie Lécluse, Senior Vice President, Crown Packaging European Division GmbH, said: “This successful outcome for the scheme members is the result of collaborative Company and Trustee planning and activity over the last 10 years. We are pleased to have enabled the Trustees to fully secure members benefits at an earlier point than they had expected. Our respective advisors have worked together to ensure both Company and Trustee objectives were met”

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