Renold
Renold, the international supplier of industrial chains, employs around 2,500 people in more than 23 countries around the world. The Renold’s DB pension scheme entered a buy-in to fully de-risk around 25% of its UK pensioner liabilities with Just Retirement.
The £25m medically underwritten buy-in covers just 35 members, with higher annual pension incomes, who represent a significant concentration of longevity risk – given the scheme has around 3,500 members in total.
Under the terms of the buy-in, Just Retirement secures a quarter of the scheme’s pensioner liabilities by insuring the benefits of the members with the highest liabilities. The insurer’s medical underwriting meant the scheme was able to secure the liabilities at a small discount to their assumed funding valuation after more than 90% of members provided medical information.
The company said that attractive pricing terms combined with the medical underwriting process meant the scheme could secure the liabilities at a small discount to their assumed funding valuation.
The transaction has no impact on the funding level of the scheme and did not require any additional contributions from the group. Consideration for the buy-in will be sourced entirely from a portion of the scheme’s index-linked UK government bonds. The group is now fully protected from volatility in longevity, inflation and interest rates in respect of these members.
Barnett Waddingham advised the scheme on the agreement, for which conversations began in November 2014, and appointed MorganAsh to undertake the medical collection and tender process.