Warwick International Group Pension Scheme
- Category:
- Clients
In June 2009, the Trustees of the Warwick International Group Pension Scheme agreed a pension insurance buy-in agreement with Pension Insurance Corporation.
Warwick, a leading supplier of speciality chemicals, was acquired in August 2008 in a management buyout backed by Close Brothers Private Equity Capital, which then became the ultimate sponsor of the pension fund. This is therefore a rather unusual deal in that a private equity house actively moved to help the trustees remove some of the uncertainty around a final salary pension fund.
The general reduction in the overall level of pension risk and investment volatility benefits both the Trustees and the sponsor.
In a pension insurance buy-in Pension Insurance Corporation (PIC) provides an insurance policy to the Trustees, bringing certainty around pension payments to a specific section of their membership. In this case, the retired pensioners. The liabilities were valued at approximately £57m.
Transaction highlights:
Value and certainty:
- The Trustees were impressed by PIC's financial strength and administrative capabilities
- A key metric for them was PIC's ability to be flexible regarding the Scheme's requirements
- PIC has taken over the administration
Focus on the pension fund members:
- The Trustees considered PIC the best option for reducing the level of voltility in the pension fund
- The transaction added a new level of security to member benefits by reducing the Scheme's exposure to risk
"We are pleased that the pension scheme Trustees have secured this insurance contract, which we believe represents the best outcome at this point for the members of the pension scheme."
Steve Williams, Finance Director, Warwick International Group
"We are delighted to have appointed Pension Insurance Corporation as our partner in this insurance buy-in. For us, this is a crucial step in de-risking the Pension Scheme and increases the level of security for our scheme members. We were able to secure the insurance contract at a price within our funding provisions, so this seemed to be particularly good value."
Phil Kelsall, Chair of the Trustees
