Container company insures DB liabilities
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The Contship Containerlines Limited 1979 Pension Scheme has agreed a roughly £25m full buy-in covering around 150 members.
The trustees picked Legal & General for the transaction that was agreed this month.
In September 2022, the closed scheme had a surplus of $2.9m (£2.3m). More than half (54%) of the members were deferred and 46% were pensioners, according to its latest annual report.
In September 2022, the closed scheme had a surplus of $2.9m (£2.3m). More than half (54%) of the members were deferred and 46% were pensioners, according to its latest annual report.
Scheme sponsor CP Ships ceased trading in 2006 and is winding up its former operations, only remaining active to deal with damage claims and pension schemes. In June last year, owner TUI AG agreed to provide financial support to its subsidiary.
Trustee chair Paul Rogers said: “Our job as trustees is first and foremost to ensure our members receive the benefits they are entitled to, which is why we are thrilled to have secured this transaction with L&G. It has been an aspirational goal of ours for many years, but now has become a reality. This wouldn’t have been possible without the great support TUI has given the scheme.”
TUI’s head of financial accounting content, Jörg Rosendahl, said: “We are pleased to have worked closely with the trustees and their advisers to support the scheme to complete this transaction.”
Adrian Somerfield, director in the UK Pension Risk Transfer team at L&G, said the trustees were able to lock the price to the scheme’s existing L&G asset management pooled funds before novating these to the insurer as part of the premium payment.
“This ensured cost certainty and a seamless transaction,” he noted.
The scheme was advised by Barnett Waddingham, who gave actuarial, administration, investment and risk transfer advice. Burges Salmon were the trustees’ lawyers.
Nikhil Patel, a senior risk transfer adviser at Barnett Waddingham, said: “Working closely with the trustees, the BW teams were able to ensure the scheme could efficiently navigate the crowded market and work collaboratively with L&G to achieve the transaction objectives.”
