Pension Insurance Corporation insures the Alliance Unichem UK Group Pension Scheme
31st August 2010
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Pension Corporation bolsters client service team
21st July 2010
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Pension Insurance Corporation Insures Alitalia Italian Airlines Pension and Assurance Scheme
15th July 2010
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Pension Insurance Corporation – Market Volatility Driving Search For Pension Security
5th July 2010
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Statement regarding John Fitzpatrick and Philip Moore
7th June 2010
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Brand New Website Pensionomics.com Launches to Fuel National Debate on Pensions
1st June 2010
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With pension reform high on the new Government's agenda, Pensionomics.com launches today, seizing the moment to help fuel the pensions debate. Launched as a resource for anyone wanting to contribute to the debate or research in this vital field, Pensionomics.com is a new website which provides easy, free and open access to industry-wide commentary and research on the pensions landscape in the UK and internationally.
The website will be a public forum, supporting debate in promotion of the core principles of efficiency, equity and sustainability in the provision of pensions in both the public and private sectors. Pensionomics is also tweeting: @Pensionomics.
The Trades Union Congress (TUC), Confederation of British Industry (CBI), Social Market Foundation, David Willetts MP and think tank Policy Exchange are amongst those to have spoken out on the pensions-related issues they feel the new government must address on Pensionomics.com. This includes arguments for raising the pension age, developing a proper strategy around low earners and dealing with the demographic challenges ahead.
Hosted Comment
David Willetts MP: “Traditional company pension schemes were a kind of contract between the generations and as that has broken down the challenge is to create new savings instruments that help people through the lifecycle, help younger people to start saving, and perhaps even once more spread the risk across the generations.”
Nigel Stanley, Trades Union Congress: “The easy way to give people better pensions is to raise the pension age, and distribute the same expenditure among fewer pensioners...But making them instead reliant on much meaner benefits for the unemployed, and the increasingly draconian regime that treats anyone without a job as a workshy scrounger hardly seems a social advance.”
Guy Bailey, CBI: “We…believe it is essential that, within its first months in office, the next government should establish an independent commission to investigate the true costs of public sector pensions, and to put forward principles for reform.”
Lawrence Kay, Policy Exchange: "The key pension policy challenge for the next government will be developing a proper strategy around low-earners…The central issue in this choice is whether the government wants to keep incentivising its staff to stay in the public sector by offering them generous pensions, or if it would prefer to risk more fluid staff movements by having total remuneration packages that are more up-front and akin to those offered in the private sector.”
Pensionomics.com aims to tackle a broad range of pension-related themes, including public policy; the role of capital markets; asset-liability management; state and private sector pensions; longevity; socio-political considerations; labour market issues and the economic history of pensions.
The website will link to Pensions Tomorrow, a research initiative devoted to pension and longevity at the London School of Economics, and will also include independent research and commentary from Pension Corporation’s Thought Leadership programme. Pension Corporation is the site sponsor and has paid for its development, but will have minimal editorial oversight.
Pensionomics.com currently hosts research topics including:
- the ongoing impact of the credit crunch on the UK pensions landscape
- international approaches to public sector pensions
- the current distribution of tax relief
- an analysis of the unfunded public sector pension liabilities and debt in the national accounts
“Pension Corporation has advocated a national debate for some time now on the future of pensions in this country. Although much is written about the cost of public sector pensions and the death of defined benefit, there is no real debate about what should be done. We have decided to help facilitate the debate through this independent website, which will be free to all users,” said Dr Bob Swarup, one of the lead contributors to Pensionomics.com and Partner, Pension Corporation.
“We intend Pensionomics.com to be a live forum for analysis and debate on the key pension issues, which ought to be addressed during this Parliament, from the challenges facing low earners but increasingly also those on above average incomes,” said Dr Frank Eich, Senior Economist, Pension Corporation. “We believe that Britain deserves a more efficient, equitable and sustainable pension system and that this cannot be achieved solely by moving to defined-contribution provision, but this is an issue that has all but been ignored to date.”
For further information:
Pension Corporation
Jeremy Apfel
+44 (0)20 7105 2140
Financial Dynamics
Rob Bailhache
+44 (0)20 7269 7200
Keren Perrott
+44 (0)20 7269 7218
About Pension Corporation
Pension Corporation is a leading provider of risk management solutions to the trustees and sponsors of defined benefit pension funds. It oversees pension fund liabilities of c.£6 billion and is affiliated to more than 100,000 pension scheme members or former members. Its FSA authorised and regulated insurance company, Pension Insurance Corporation (“PIC”), brings safety and security to scheme members’ benefits through innovative, tailored solutions. These include pension insurance buyout or buy-in and longevity risk management. It has transacted both the UK’s largest and the first public sector backed pension insurance buyouts. Other clients include FTSE 100 companies and several multinationals. PIC is proud to work with pension fund trustees to maximise member benefits. For further information please visit www.pensioncorporation.com
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73% of Trustees Planning to De-Risk – Biggest Barrier is Cost
24th May 2010
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73% of UK pension fund trustees are planning to reduce their pension fund’s exposure to risk in the coming years, through a variety of strategies, according to data gathered in one of the largest independent studies yet conducted: “The Future of Pension Schemes”.
To date, 65% of trustees have taken steps to reduce risk: 28% having reduced their exposure to the equity markets; 25% having employed a liability driven investment strategy; and 8% having completed one or more pension insurance buy-ins or a buyout.
Looking at future liabilities, the study showed that 57% of trustees are considering a liability driven investment strategy, with 35% considering longevity insurance and 45% considering a buy-in or buyout. Overall the biggest barrier to reducing risk is cost with 65% citing this as an issue, which is perhaps why 53% of trustees want to prioritise funding any deficit.
The study, which ran from January to March 2010, is published by Pension Corporation, the leading provider of risk management solutions to defined benefit pension funds, in association with Engaged Investor, the trustee magazine.
David Collinson, head of origination, Pension Corporation, said: “This important study brought several key considerations to light, all of which will have a significant impact on the future of defined benefit pension funds in the UK. The study demonstrated that the fall of Lehman Brothers had a marked impact on the risk tolerance of pension fund trustees and we can see that the vast majority are now seeking to limit their exposure to risk.”
Bob Campion, Editor of Engaged Investor, said: “It is clear that our readers have a single goal: reducing risk in their pension fund. But their minds are open as to the best route, and most are actively exploring a wide range of options. One thing is sure: we can expect the occupational pensions landscape in the UK the change significantly in the next few years.”
For further information:
Pension Corporation
Jeremy Apfel
+44 (0)20 7105 2140
Financial Dynamics
Rob Bailhache
+44 (0)20 7269 7200
Keren Perrott
+44 (0)20 7269 7218
Engaged Investor
Bob Campion
+44 (0)20 7618 3485
bob.campion@nqsm.com
About the “Future of Pension Schemes” Trustee Survey
The study was conducted by readers of Engaged Investor’s magazine and website between January and March 2010. 243 lay trustees, consultants, pension managers and independent trustees took part. 58% were lay trustees, 17% pension managers and 15% professional consultants or independent trustees. 64% of respondents represent UK pension schemes with at least £100m in assets. Aggregate assets under management for all respondents is approximately £50bn.
The study can be downloaded for free at www.pensioncorporation.com
About Engaged Investor
Engaged Investor The Trustee Magazine, is the only magazine and website dedicated to the UK’s army of occupational pension fund trustees. Launched in 2004, the magazine has a readership of 8,100 pension trustees and 2,000 pension professionals. Engaged Investor runs two free conferences for trustees each year and holds the UK’s only Trustee Awards in July. www.engagedinvestor.co.uk
About Pension Corporation
Pension Corporation is a leading provider of risk management solutions to the trustees and sponsors of defined benefit pension funds. It oversees pension fund liabilities of c.£6 billion and is affiliated to more than 100,000 pension scheme members or former members. Its FSA authorised and regulated insurance company, Pension Insurance Corporation (“PIC”), brings safety and security to scheme members’ benefits through innovative, tailored solutions. These include pension insurance buyout or buy-in and longevity risk management. It has transacted both the UK’s largest and the first public sector backed pension insurance buyouts. Other clients include FTSE 100 companies and several multinationals. PIC is proud to work with pension fund trustees to maximise member benefits. For further information please visit www.pensioncorporation.com
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Pension Fund Trustees: “We Should Be Paid”
26th April 2010
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62% of UK occupational pension fund trustees believe they should be paid due to the ever-increasing pensions expertise they are now required to have, according to one of the largest independent studies yet conducted.
The study covered 243 respondents - 142 lay trustees and 101 consultants, pension managers and independent trustees. 64% of the respondents represent UK defined benefit pension schemes with at least £100m in assets under management. Aggregate assets under management for all respondents are approximately £50 billion.
The “increasing pensions expertise required” was cited by 55% of respondents as the reason why trustees should be paid, with 17% claiming it was due to the “significant level of responsibility”, and 14% citing the “amount of unrecognised time spent”.
The study, which ran from January to March 2010, was carried out with the readers of Engaged Investor, the trustee magazine, in association with Pension Corporation, the leading provider of risk management solutions to defined benefit pension funds.
The Pensions Regulator’s “Trustee Knowledge & Understanding” guidance outlines the knowledge levels required of occupational pension fund trustees. The full version of the document lists 13 distinct areas of knowledge and 94 specific knowledge requirements.
In a similar study conducted by Engaged Investor magazine of its readers in February 2006, only 50% of respondents believed trustees should be paid.
“There is little doubt that trustees have become expected to understand pensions much more intimately in the last few years, mostly due to the requirements of the Pensions Regulator but also due to the development of the marketplace,” said Engaged Investor Editor Bob Campion. “It is about time this responsibility was recognised financially.”
David Collinson, head of origination, Pension Corporation, said: “Trustees have undoubtedly had an increasing series of responsibilities placed on them over the past few years, not least the obligation to understand all the de-risking options open to them. It is also vital for them to understand how these options might work, a significant additional area of complexity.”
“As professional trustees have become more commonplace on trustee boards, lay trustees feel they should be financially compensated for their increasing expertise; particularly in areas such as investment and actuarial valuations,” added Bob Campion. “The counter argument is typically that trustees should volunteer for the right reasons – not because they want the money. The other question is; who would pay them?”
For further information:
Pension Corporation
Jeremy Apfel
+44 (0)20 7105 2140
Financial Dynamics
Rob Bailhache
+44 (0)20 7269 7200
Keren Perrott
+44 (0)20 7269 7218
Engaged Investor
Bob Campion
+44 (0)20 7618 3485
+44 (0)7960 773039
bob.campion@nqsm.com
About the “Future of Pension Schemes” Trustee Survey
The study was conducted by readers of Engaged Investor’s magazine and website between January and March 2010. 243 lay trustees, consultants, pension managers and independent trustees took part. 58% were lay trustees, 17% pension managers, 15% professional consultants or independent trustees. 64% of respondents represent UK pension schemes with at least £100m in assets. Aggregated assets under management of all respondents was approximately £50bn.
More details of the survey will be released shortly.
About Engaged Investor
Engaged Investor The Trustee Magazine, is the only magazine and website dedicated to the UK’s army of occupational pension fund trustees. Launched in 2004, the magazine has a readership of 8,100 pension trustees and 2,000 pension professionals. Engaged Investor runs two free conferences for trustees each year and holds the UK’s only Trustee Awards in July. www.engagedinvestor.co.uk
About Pension Corporation
Pension Corporation is a leading provider of risk management solutions to the trustees and sponsors of defined benefit pension funds. It oversees pension fund liabilities of c.£6 billion and is affiliated to more than 100,000 pension scheme members or former members. Its FSA authorised and regulated insurance company, Pension Insurance Corporation (“PIC”), brings safety and security to scheme members’ benefits through innovative, tailored solutions. These include pension insurance buyout or buy-in and longevity risk management. It has transacted both the UK’s largest and the first public sector backed pension insurance buyouts. Other clients include FTSE 100 companies and several multinationals. PIC is proud to work with pension fund trustees to maximise member benefits. For further information please visit www.pensioncorporation.com
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Pension Deficits Narrowed by £30 Billion Due to Increased Real Gilt Yields
15th March 2010
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The effective doubling of long-dated real gilt yields from ½% over inflation to 1% over the last three months has brought down UK pension scheme liabilities. Trustees will have accordingly seen deficits narrow by over £30 billion, according to Pension Corporation’s Q1 2010 Pension Risk Transfer Index, published today.
Pension Corporation, a leading provider of risk management solutions to defined benefit pension funds, estimates that every ½% rise in real gilt yields could lower liabilities by 7%. For those pension funds with valuations due in March 2010, and their sponsors, this may be good news. However, volatility remains and this trend may prove short-lived.
In contrast, those pension schemes with deficits based on valuations made at 31 March 2009, undoubtedly the worst time for valuations given the crash in asset values, will have difficult discussions with their sponsors regarding funding plans. They will also have to consider the strength of the corporate covenant against the requirement to close the deficit.
The forthcoming financial reporting season will be critical in this regard, as there can be a large gap between the liability that companies report in their accounts and the liability they are committed to funding. At times this gap can become so big as to make IAS 19 very unreliable as a basis for assessment of the company’s commitments.
In the public sector, local authorities will be constrained from passing on increased pension costs to the taxpayer, so may look to transfer risk in different ways.
Pension Corporation’s projection for the size of the pension risk transfer market during 2010 is £15–£20 billion, including a significant amount of longevity risk transfer. Insurance buy-ins and longevity insurance will be seen increasingly as an asset class by pension fund trustees.
David Collinson, partner at Pension Corporation, commented:
“The Lehman Brothers bankruptcy really brought home to many market participants the risks to which their investments were exposed. For the first time since then demand for risk transfer solutions increasingly matches affordability, primarily for partial solutions. We can therefore expect to see an increase in demand for pension risk transfer solutions during 2010.”
Notes to Editors:
For further information please contact:
Pension Corporation
Jeremy Apfel
+44 (0)20 7105 2140
Financial Dynamics
Rob Bailhache
+44 (0)20 7269 7200
Nick Henderson
+44 (0)20 7269 7114
Keren Perrott
+44 (0)20 7269 7218
About Pension Corporation
Pension Corporation is a leading provider of risk management solutions to the trustees and sponsors of defined benefit pension funds. Its FSA authorised and regulated insurance company, Pension Insurance Corporation (“PIC”), brings safety and security to scheme members’ benefits through innovative, tailored solutions. PIC has over £3bn in assets under management and has insured c.50,000 pension fund members. Its solutions include pension insurance buyout or buy-in and longevity risk management. It has transacted both the UK’s largest and the first public sector backed pension insurance buyouts. Other clients include FTSE 100 companies and several multinationals. PIC is proud to work with pension fund trustees to maximise member benefits. For further information please visit www.pensioncorporation.com
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Pension Corporation Pension Risk Transfer Index
15th March 2010
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The effective doubling of long-dated real gilt yields from ½% over inflation to 1% over the last three months has brought down UK pension scheme liabilities. Trustees will have accordingly seen deficits narrow by over £30 billion, according to Pension Corporation’s Q1 2010 Pension Risk Transfer Index, published today.
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Aggregate Industries transfers £300M of pensions risk
9th March 2010
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Aggregate Industries Limited (“the Company”) today announces that its two largest pension schemes have entered into insurance transactions to transfer risk to Pension Insurance Corporation (“PIC”), a leading provider of risk management solutions to defined benefit pension funds.
The two transactions are as follows:
- A circa £210m insurance policy purchased by the Aggregate Industries Pension Plan to meet all future payments for pensions in payment as at 30th April 2009.
- A circa £95m insurance policy purchased by the Foster Yeoman Retirement Plan 2000 to insure the benefits for all members. It is expected that in due course the Plan will be wound up removing any further obligation on the Company.
Lane Clark & Peacock LLP acted as lead adviser to the Company and the Trustees of the two pension schemes on the transactions.
Ian McGown, Head of Pensions and Benefits at Aggregate Industries, said:
“These transactions follow a wide-ranging review of the pension risks underwritten by Aggregate Industries and the options available to address them.
We are extremely pleased to have completed two complex transactions simultaneously and in such a short period. Pension Insurance Corporation's tailored solutions and competitive financial propositions ensured they were selected ahead of several other insurers.
These transactions were made possible by close co-operation between the Company, Trustees and professional advisers, working towards agreed objectives. It involved a thorough selection, due diligence and negotiation process, leading to commercial terms which made the transactions attractive to both the Company and the Trustee. The transactions bring further increased security to members’ benefits for the long-term.”
Michael Berg, Partner at Lane Clark & Peacock LLP, said:
“We are delighted to have advised Aggregate Industries and the Trustees of both pension schemes and helped them achieve a fundamental reduction in the levels of pension risk.
Setting up a framework for monitoring de-risking opportunities allowed the schemes to move quickly once market conditions had improved, and to lock in to favourable pricing.
We are working with a number of pension schemes and companies to explore de-risking transactions and expect 2010 to be a very successful year for the pensions risk transfer market.”
John Coomber, Chief Executive, Pension Insurance Corporation, commented:
“I am delighted that we have been able to help the Trustees and sponsor bring security to the pension schemes’ members’ benefits in what was a complex transaction. The Trustees’ ability to move quickly, with the key support of LCP and the sponsor, was of critical importance in transferring risk, given recent volatility in the markets.
Pension Insurance Corporation has had a strong start to the year, building on our leading market share for 2009, and I believe that 2010 will be a significant year for pension risk transfer transactions.”
For further information, please contact:
Lane Clark & Peacock LLP
Mark Roberts
+44 (0)20 7432 3096
Aggregate Industries Limited
Chris Higgs
+44 (0)1530 816671
Pension Insurance Corporation
Jeremy Apfel
+44 (0)20 7105 2140
Notes to editors:
Aggregate Industries
Aggregate Industries is a leading player in the construction industry, committed to creating a better built environment. The company produces and supplies a wide range of construction materials including aggregates, asphalt, ready mixed concrete and pre-cast concrete products. It also imports and supplies cementitious materials and offers a national road surfacing and contracting service.
Aggregate Industries’ expertise, capability and solutions-focused approach have made it the preferred partner on some of the UK’s largest construction projects. The company is a pioneer of best practice in sustainability. It was the first company to be certificated to BES 6001, The Framework Standard for the Responsible Sourcing of Construction Products, developed by the BRE (Building Research Establishment) and a founding member of the UK Green Building Council.
Aggregate Industries operates across the UK, Channel Islands and northern Europe, and is a member of the Holcim Group. For further information, please visit www.aggregate.com
Lane Clark & Peacock
Lane Clark & Peacock LLP (LCP) is one of the leading firms of consulting actuaries in Europe, with a wide range of clients including some of the largest global multinationals as well as a number of private equity houses, charities and unions.
Over the last three years, LCP has taken a lead-advisory role on 14 significant buy-in and buyout transactions.
The firm currently has 84 partners and over 500 staff based in offices in London, Winchester, Jersey, Brussels, Zurich, Basel, Utrecht and Dublin. For more information on LCP please visit www.lcp.uk.com
LCP is part of the Alexander Forbes group of companies which employs over 4,000 people internationally. For more information on Alexander Forbes and its insurance, risk and financial services, please visit the website at www.alexanderforbes.com
Pension Corporation
Pension Corporation is a leading provider of risk management solutions to the trustees and sponsors of defined benefit pension funds. It oversees pension fund liabilities of c.£6 billion and is affiliated to more than 100,000 pension scheme members or former members. Its FSA authorised and regulated insurance company, Pension Insurance Corporation (“PIC”), brings safety and security to scheme members’ benefits through innovative, tailored solutions. These include pension insurance buyout or buy-in and longevity risk management. It has transacted both the UK’s largest and the first public sector backed pension insurance buyouts. Other clients include FTSE 100 companies and several multinationals. PIC is proud to work with pension fund trustees to maximise member benefits. For further information please visit www.pensioncorporation.com
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Pension Corporation Announces 2009 Preliminary Results
4th February 2010
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Pension Corporation (“PC”), a leading provider of risk management solutions to defined benefit pension funds, is pleased to announce excellent preliminary results for the 12 month period ended 31 December 2009, despite the difficult financial and economic environment. Significant strides have been made in establishing the company as a trusted risk manager, helping pension fund trustees and sponsors to remove risk to the benefit of members.
2009 Pension Insurance Corporation Highlights
- Attains leadership of the bulk pension insurance market - new pension insurance business of £1.1 billion transacted
- Embedded Value of £618 million as at 31 December 2009 – up 50% over the year
- Embedded Value earnings in the year ended 31 December 2009 of £202 million
- Strong and conservatively managed balance sheet with PIC’s regulatory capital ratio standing at 178% of the required minimum
- £3.3 billion in assets under management and around 45,000 pension fund members insured
Sir Mark Weinberg, Group Chairman commented: “I am delighted that 2009 was a very successful year for the business. Pension Insurance Corporation was able to win some very significant transactions when faced with strong competition from the legacy players. I believe that pension fund trustees are coming to see us as the market leader and the value of this cannot be underestimated.
“Our ability to tailor transactions to meet trustee and corporate needs has enabled us to increase our market share to in excess of 25% (estimated).
“We expect to see the market continue to grow with up to £20 billion of pension risk transferred during the current year. There may also be opportunities for Pension Corporation’s growth arising out of market consolidation or the sale of annuity books by other insurers.”
During 2009, PIC wrote a total of eight transactions and has now completed 17 in total. These included the buyout of Food from Britain, which was the first insurance transaction for a public sector backed pension scheme.
Leyland DAF was also significant as PIC is working with the trustees to assess the level of surplus and consider how best it can be used by the scheme members, including the amount of any benefit improvements.
During the latter half of the year, PIC worked with FTSE 100 companies including Cadbury and Liberty, several multi-national companies including Denso, and private equity owned companies, such as Warwick, to manage pensions related issues.
Pension Corporation Investments
Despite the challenging economic environment, our two operational businesses, telent and Quadriga, continued to perform well and are taking market share. telent is the former GEC Marconi and Quadriga is Europe’s largest hotel entertainment supplier. The companies made a combined EBITDA of £62 million in the year to March 2009, a strong operational performance. telent recently announced it was part of a consortium winning a £1.4 billion contract to manage BT’s Openreach network. Quadriga launched a major new product for its hotel customers, Sensiq – the most powerful guest communications portal available – which we believe will lead to increased market share.
Thought Leadership Programme
Pension Corporation’s Thought Leadership programme, which is committed to facilitating a debate around both public and private sector pensions, published a number of white papers focussing on the impact of the economic crisis on the pensions landscape.
Notes to Editors:
For further information please contact:
Pension Corporation
Jeremy Apfel
+44 (0)20 7105 2140
Financial Dynamics
Rob Bailhache
+44 (0)20 7269 7200
Nick Henderson
+44 (0)20 7269 7114
- The year end solvency ratio is the amount of Available Capital Resources above the Required Capital
- The figures provided are preliminary and are to be audited
About Pension Corporation
Pension Corporation is a leading provider of risk management solutions to the trustees and sponsors of defined benefit pension funds. It oversees pension fund liabilities of c.£6 billion and is affiliated to more than 100,000 pension scheme members or former members. Its FSA authorised and regulated insurance company, Pension Insurance Corporation (“PIC”), brings safety and security to scheme members’ benefits through innovative, tailored solutions. These include pension insurance buyout or buy-in and longevity risk management. It has transacted both the UK’s largest and the first public sector backed pension insurance buyouts. Other clients include FTSE 100 companies and several multinationals. PIC is proud to work with pension fund trustees to maximise member benefits. For further information please visit www.pensioncorporation.com
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Pension Insurance Corporation insures the FTSE 100 Liberty International defined benefit pension scheme
4th February 2010
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Pension Corporation, a leading provider of risk management solutions to defined benefit pension funds, today announces that Pension Insurance Corporation is to insure the Liberty International Group Retirement Benefit Scheme.
In return for fully insuring the liabilities of the Scheme, Pension Insurance Corporation will receive assets amounting to £61 million, comprising £46 million in Scheme assets and £15 million additional company contribution. The Scheme has 203 members.
Liberty International PLC is one of the UK’s largest listed property companies and a constituent of the FTSE 100 Index of the UK’s leading listed companies. At 30 June 2009, adjusted, diluted shareholders’ funds amounted to £2.6 billion and Liberty International owned £6.1 billion of properties; UK regional shopping centres comprised 73 per cent and retail property in aggregate 86 per cent. Liberty International converted into a UK Real Estate Investment Trust (REIT) on 1 January 2007.
David Bramson, Chairman of the Scheme Trustees, said:
“Pension Insurance Corporation offers a strong proposition in securing member benefits for the long term. I am very pleased that we were able to conclude the transaction with PIC. The PIC team was very helpful and constructive in negotiations, helping us to achieve the best overall result for our members.”
Akash Rooprai, a Principal at Mercer, said:
“In its role as lead adviser and broker for this transaction, Mercer helped the trustees to explore a range of potential solutions. PIC’s flexible approach and efficient execution helped them win this contract.”
John Coomber, Chief Executive, Pension Insurance Corporation, commented:
“We are delighted to have been able to help Liberty International and its pension fund trustees bring security to the benefits of its members. Liberty deserves credit for using corporate resources to help achieve this. This is the second FTSE 100 risk transfer transaction which PIC has completed and I look forward to further transactions during 2010.”
For further information:
Pension Corporation
Jeremy Apfel
+44 (0)20 7105 2140
Financial Dynamics
Rob Bailhache
+44 (0)20 7269 7200
Nick Henderson
+44 (0)20 7269 7114
About Pension Corporation
Pension Corporation is a leading provider of risk management solutions to the trustees and sponsors of defined benefit pension funds. It oversees pension fund liabilities of c.£6 billion and is affiliated to more than 100,000 pension scheme members or former members. Its FSA authorised and regulated insurance company, Pension Insurance Corporation (“PIC”), brings safety and security to scheme members’ benefits through innovative, tailored solutions. These include pension insurance buyout or buy-in and longevity risk management. It has transacted both the UK’s largest and the first public sector backed pension insurance buyouts. Other clients include FTSE 100 companies and several multinationals. PIC is proud to work with pension fund trustees to maximise member benefits. For further information please visit www.pensioncorporation.com
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New association launched to promote trading of longevity risk as an asset class
1st February 2010
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The Life and Longevity Markets Association (‘LLMA’) announces its launch today.
The LLMA has been formed to promote the development of a liquid traded market in longevity and mortality-related risk, of the type that exists for Insurance Linked Securities (ILS), and other large trend risks like interest rates and inflation. The association will support the development of consistent standards, methodologies and benchmarks to help build a liquid trading market, necessary to support the future demand for longevity protection sought by insurers and pension funds.
The LLMA has been established by AXA, Deutsche Bank, J.P. Morgan, Legal & General, Pension Corporation, Prudential, RBS and Swiss Re.
“In the UK alone the total pension liabilities of all parties exceed £2 trillion. When one considers the size of the worldwide market it becomes clear that all parties would benefit from the development of a liquid traded market in life and longevity risks.”
John Fitzpatrick, a Director of the LLMA said: “The launch of the LLMA brings together a number of parties to create marketwide standards suitable to promote a liquid traded market. Longevity risk is starting to move to pension insurers and reinsurers in significant volumes but much more is likely in the future from pension funds anxious to control their future liabilities. The LLMA’s work will bring benefits to capital markets investors enabling their investment and trading through the growth of a new and uncorrelated asset class. Insurers and reinsurers will benefit by bringing standardised structures to what is today a private, bespoke market. Pension Funds and others with significant financial risk from longevity will benefit from the increased capacity a standardised market will create. Such a marketplace would permit new and flexible solutions for those with longevity and mortality exposures. Increased capacity will also allow pension funds and others to help achieve their objective to secure their members’ benefits for the long term sooner than would otherwise be the case. This development would go a long way to promote a much-needed stability in retirement systems.”
“Increasing numbers of pension funds will seek to stabilise their liabilities through longevity insurance and swaps. As the baby boomers retire and longevity expectations continue to increase across the developed world at historically high rates against largely fixed retirement / entitlement dates demand will rise for ways to protect against this growing financial risk. The development of longevity trading will help to address the future expected demand in the market and allow more and more pension funds to secure their members’ benefits for the future.”
“To date almost all longevity capacity has been provided by the insurance and reinsurance markets. However, given the vast size of global pension liabilities, it is clear that there will be insufficient capacity in these markets to absorb the risks. It is our belief that the capital markets will have an appetite for assets like these that are not correlated with market or credit risks, and hence we have set up the LLMA to facilitate the evolution of the market.”
NOTES: Factfile on the LLMA
Objective
The objective of the Association is to provide a forum for market participants to collaborate with a view to articulating criteria for, and assisting in the establishment of, suitable and consistent standards, conventions and best practices to promote liquidity in the trading of financial instruments that reference longevity and mortality related risks as well as consistency of relevant demographic data
Benefits
Benefits that will be delivered by the Association include improved transparency due to the development of standard indices for longevity, standard financial products linked to longevity and standard methodologies for valuing products.
Scope
The primary focus of the LLMA is pension-related longevity and mortality, rather than life settlements. In the short term the LLMA will be primarily focused on the UK market for longevity and mortality, but may later expand its horizons to other countries.
The focus of the Initiative is exclusively on macro-life related longevity and mortality risk and not on microlife (i.e. Life Settlements)
Participation
Current members of the LLMA are AXA, Deutsche Bank, J.P. Morgan, Legal & General, Pension Corporation, Prudential, RBS and Swiss Re.
The consortium is not a commercial or for-profit venture and it is the intention that any IP developed by the consortium will be made available for use by all market participants
Planned output
The LLMA plans to set standards for the new trading market it wish to promote. These are likely to include:
- Templates for standardised longevity products
- A longevity trading index
- Standardised Valuation model for longevity
Contacts
For more information, please contact
Victoria Sisson, FWD PR
Victoria.sisson@fwdpr.co.uk
020 7623 2368
About the LLMA
The Life and Longevity Markets Association (‘LLMA’) is a non-profit organisation founded and funded by current members: AXA, Deutsche Bank, J.P. Morgan, Legal & General, Pension Corporation, Prudential, RBS and Swiss Re. It aims to promote the development of a liquid traded market in longevity and mortality-related risk. The association supports the development of consistent standards, methodologies and benchmarks to help build a liquid trading market, of the type that exists for Insurance Linked Securities (ILS), and other large trend risks like interest rate and inflation.
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Pension Insurance Corporation to insure the Inchcape Shipping Services Pension Scheme; More than 100,000 pension scheme members now under Pension Corporation
25th January 2010
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Pension Corporation, a leading provider of risk management solutions to defined benefit pension funds, today announces that Pension Insurance Corporation has insured the Inchcape Shipping Services Pension Scheme (“ISS”). ISS is the world’s leading marine services provider.
Pension Insurance Corporation was selected by the trustees on the flexibility of its offering and ability to transact promptly. The pension insurance buyout is for £15 million of liabilities and relates to the entire scheme.
In a little over a year, Pension Insurance Corporation has completed the UK’s largest ever pension insurance buyout (the Thorn £1.1billion pension insurance buyout), the first ever public sector backed transaction with the former DEFRA sponsored body, Food From Britain, and a £500m pension insurance buy-in with the Cadbury Pension Fund, amongst other transactions.
Pension Corporation has achieved a leading market share by offering innovative, tailored solutions which match client requirements. It oversees pension fund liabilities of c.£6 billion and is affiliated to more than 100,000 pension scheme members or former members.
John Horrocks, Chairman of the ISS Trustees, said:
“We are very pleased to have completed this pension insurance buyout with PIC. The ongoing security of our members’ pensions is of the utmost importance to us as Trustees and we believe that PIC will provide that security for the longterm.”
Matt Barnes at Pension Insurance Corporation, commented:
“We are delighted to have been able to help the Trustees of the Inchcape Shipping Services Pension Scheme achieve their goals of securing members’ benefits. In what has been a difficult 12 months for many sponsors and pension schemes alike, we have tailored a number of innovative solutions which match the needs of trustees and scheme members and we look forward to providing further groundbreaking solutions to meet client needs during 2010.”
For further information:
Pension Corporation
Jeremy Apfel
+44 (0)20 7105 2140
Financial Dynamics
Rob Bailhache
+44 (0)20 7269 7200
Nick Henderson
+44 (0)20 7269 7114
About Pension Corporation
Pension Corporation assists the trustees and sponsors of defined benefit pension funds in removing risk from pension liabilities. As a market leader it provides risk solutions ranging from full pension insurance buyout to longevity risk insurance and asset-liability management. It offers increased levels of security and stability for members benefits through Pension Insurance Corporation Ltd (“PIC”), an FSA authorised and regulated insurance company; and Pension Corporation Investments LP Inc. (“PCI”). For further information please visit www.pensioncorporation.com
About Inchcape Shipping Services
Inchcape Shipping Services is the world’s leading marine services provider. Through its proprietary network of some 245 offices employing over 3,800 people across 63 countries, ISS provides its customers with an unparalleled global resource delivered locally and tailored to each customer’s individual needs. Its diversified customer base includes clients across the oil, cruise, container and bulk commodity sectors as well as serving naval, government and inter-governmental clients. Additionally, ISS provides landside commercial and humanitarian logistics, transit, offshore support and other associated marine services. The Company now also provides a growing range of outsourcing services. These include global crew and marine spares logistics; port agency management and commercial representation; and sophisticated Enterprise Resource Planning solutions through its subsidiary ShipNet.
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The Impact of the Credit Crunch on Pensions – Pension Corporation study
24th December 2009
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The lack of adequate preparation for the baby boomers and the highest ever level of youth unemployment risk perpetuating the current pensions crisis for at least the next two generations, according to a new paper published by Pension Corporation, which concludes that while the economic crisis and ensuing recession may now be coming to an end, the crisis in pensions continues unabated.
Looking at the impact of the credit crunch and its aftermath on pension provision in the UK, the Study, authored by Dr. Amarendra Swarup and Dr. Frank Eich, is an update of an earlier Study from June 2009. Conducted at the height of the recession, this Study concluded that the crisis had impacted on all aspects of the British pension system and would leave a lasting legacy.
“Back to the drawing board: The economic crisis and its implications for pension provision in the United Kingdom – an update” assesses where the UK pensions system stands at the end of 2009:
- The asset price recovery and the improving economic outlook is not mirrored by a recovery in the prospects for the UK pension system
- Defined-benefit pension schemes continue to struggle, with only anaemic improvements in their aggregate funding position despite the strong rally in assets over 2009, and are closing down at an increasingly rapid rate
- The rise in the value of assets in defined-contribution schemes, whilst welcome, illustrates the volatility and the burden of the future risk placed on the individual
- Alongside the consequences of the current crisis, society also has to prepare for the economic and fiscal consequences of population ageing, married to the retirement of the baby boomers
- With youth unemployment rising to its highest ever, there is the risk that an entire cohort could start their working lives with a broken employment record, making it difficult for them to build up adequate pension entitlements or other forms of long-term savings
- With little evidence of individuals planning for retirement, the likelihood remains that a large percentage of future pensioners will be disappointed by their retirement income
- Meanwhile, the public finance outlook remains bleak and the future fiscal tightening required will depress disposable income growth for years to come and leave the government in a weak position to deal with the above challenges
Pension Corporation is committed to helping facilitate a debate around pensions, through its own published studies and research, sponsorship of other reports, the Pensions Tomorrow initiative at the London School of Economics and other projects.
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Cadbury Pension Fund insures £500m liabilities
16th December 2009
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Pension Risk Transfer Market to have busiest quarter since Q3 2008
19th October 2009
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Pension Corporation Pension Risk Transfer Index
19th October 2009
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Pension Insurance Corporation to insure three Denso pension schemes
17th September 2009
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Pension Corporation Strengthens Team To Ensure Smooth Processing of New Business Pipeline
10th September 2009
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Pension Insurance Corporation insures the final tranche of the Thomson Regional Newspapers Pension Fund
4th September 2009
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Pension Insurance Corporation insures the Walthamstow Stadium Limited Retirement Benefits Scheme
24th August 2009
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“Pensions’ very own systemic risk” by Dr Frank Eich, Professional Pensions
21st August 2009
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Buyout and risk reduction
19th August 2009
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Bulk Annuities Panel: “Ups and downs”
23rd July 2009
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Pension Corporation named “European Breakthrough Firm of the Year”
13th July 2009
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“Time for a national debate on pension reform” by Edmund Truell, Financial News
6th July 2009
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Pension Insurance Corporation appoints Schroders to manage £100 million
30th June 2009
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“Time to grasp the pensions nettle before it’s too late” by Edmund Truell, The Sunday Telegraph
28th June 2009
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Ponzi public sector pensions schemes – the Second National Debt
11th June 2009
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Pension Insurance Corporation to insure the Warwick International Group Pension Scheme
9th June 2009
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Back to the drawing board: The economic crisis and its implications for pension provision in the United Kingdom by Dr Frank Eich and Dr Amarendra Swarup
1st June 2009
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Pension Corporation launches study on public sector pay and pensions
18th May 2009
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Pension Corporation memorandum included in House of Commons Insolvency Service report
8th May 2009
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Pension Insurance Corporation to insure the Retirement Benefits Scheme of Food from Britain
27th April 2009
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Bulk Annuities Panel: “A tectonic shift”
26th March 2009
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Pension Corporation Announces Results for the Year Ended 31st December 2008
18th March 2009
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“More long-dated gilts needed, please” by John Fitzpatrick, Financial Times
18th January 2009
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Bulk Annuities Panel: “Maintaining Confidence”
15th January 2009
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Pension Insurance Corporation agrees to insure the Leyland DAF Pension Scheme
13th January 2009
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Pension Insurance Corporation agrees to insure the Merchant Retail Group Pension Scheme
19th December 2008
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Pension Insurance Corporation agrees to insure Thorn Pension Fund in largest ever UK buyout
15th December 2008
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Bulk Annuities Panel: “Forwards and Back”
4th December 2008
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“Reaching the crunch decisions” featuring Steven Lowe & Amarendra Swarup, Pensions Week
24th November 2008
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“One Rung at a Time” by Dr Amarendra Swarup, Pensions Week
24th November 2008
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“Pensions Week asks to what extent a finance director should become involved in his or her company pension” featuring John Coomber, Pensions Week
24th November 2008
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Pension Corporation to raise more capital to fund growth, anchored by J.P. Morgan investment; to acquire Synesis Life team
18th November 2008
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“Saving, not spending, is the key to salvation by” by Sir Martin Jacomb, Financial Times
18th November 2008
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Pension Corporation launches Pensions Tomorrow initiative with London School of Economics and Political Science
4th November 2008
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Pension Corporation appoints Frank Eich as Senior Economist
4th November 2008
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Pension Corporation appoints Louise Inward as General Counsel
3rd November 2008
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“Private equity can become a jewel in the crown for pension fund portfolios” by Dr Amarendra Swarup, Pensions Week
20th October 2008
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Pension Corporation strengthens senior management team with appointment of Philip Moore as Group Finance Partner
20th October 2008
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Pension Corporation says £250 billion of new capacity needed by 2012 to fulfill pensions’ buyout demand - £30 billion of additional solvency capital required
29th September 2008
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“Are public sector pension schemes a car crash waiting to happen?” by Dr Amarendra Swarup, Pensions Week
22nd September 2008
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Pension Insurance Corporation agrees to insure greater pension benefits for UK Can Pension Plan members than those provided under the Pension Protection Fund
2nd September 2008
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“Facing the music” by Dr Amarendra Swarup, Pensions Management
7th August 2008
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“What do you consider to be the biggest issues in longevity today?” featuring John Fitzpatrick, Pensions Week
7th July 2008
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“Beware the deal trip wire” by Dr Amarendra Swarup, Private Equity News
30th June 2008
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John Coomber of Swiss Re joins Pension Corporation’s management team as Executive Vice Chairman
30th June 2008
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Response to the Consultation on “Amendments to the anti-avoidance measures in the Pensions Act 2004” of April 2008
20th June 2008
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Pension Insurance Corporation agrees £451 million insurance transaction with the Delta Pension Plan
5th June 2008
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Pension Insurance Corporation agrees insurance buy-out of Swan Hill Pension Scheme
28th May 2008
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Pension Insurance Corporation announces Longevity Insurance for defined benefit pension funds
22nd May 2008
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Pensions guru shuns retirement
5th May 2008
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Financial Times, Letters – What poses greater risk to the security of pensioners?
23rd April 2008
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telent pension scheme – Powers to revert to the telent trustee board
16th April 2008
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Department for Work and Pensions – Statement re Consultation on the Powers of The Pensions Regulator (TPR)
16th April 2008
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Offer declared wholly unconditional for telent plc
15th November 2007
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Recommended Cash Offer for telent plc
25th September 2007
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Pension Corporation established the umbrella brand for Pension Insurance Corporation, Pension Corporation Investments and other subsidiaries
24th September 2007
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Pension Insurance Corporation hires AAA rated fund manager Mark Gull
30th May 2007
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Pension Insurance Corporation hires Matt Gore from Prudential
30th May 2007
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JPMorgan Worldwide Securities Services wins custody mandate for Pension Insurance Corporation
15th May 2007
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Pension Insurance Corporation licenses Algo Risk
15th May 2007
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Truell on the march with pension reform – Financial News
22nd January 2007
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Paymaster appointed by the Pension Insurance Corporation to provide pensions administration and payment services
5th December 2006
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