Credit Suisse UK completes buy-in of DB section
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The circa £1.3bn Credit Suisse Group (UK) Pension Fund has completed a full buy-in to secure members of its defined benefit scheme section.
The scheme has insured the benefits with Legal & General after looking at a number of providers and taking advice.
Members were told last month that “after consultation with the company, we decided that now was a good time to take these steps to further safeguard your pension benefits. Completing the buy-in now helps to protect the Fund for the future”.
The DB section had roughly 4,000 members in December 2022 and was 118% funded on a solvency basis, with a £196.5m surplus. At the time, it held 84.6% of assets in a liability-hedging portfolio and the remainder in bonds.
Earlier this year, the sponsoring employer was hoping for an update on whether the government will override the Court of Appeal decision in Virgin Media v NTL Pension Trustees, as it was contracted out. In June, CS stated in its interim report that the Virgin Media decision “has implications for the scheme”.
It added: “However, the Department of Work & Pensions is working with industry groups to consider whether to amend the law and (in effect) negate the effects of the judgement. As this stage therefore only a limited review of some of the scheme’s documents in the period has been undertaken. Following that review no adjustments to the pension liabilities has been made, but this matter will continue to be kept under review.”
The CS UK scheme also has a substantial defined contribution section, worth £1.1bn in 2022.
The scheme’s employer, Credit Suisse International, is currently owned by UBS. The rival Swiss bank bought Credit Suisse in a high profile rescue operation in March 2023, arranged by global finance ministers to prevent a banking crisis.
Independent Governance Group was appointed as sole trustee in August that year, represented by Chris Martin.
The buy-in comes as nearly half of 140 trustees, consultants and lawyers expect transactions to reach between £50bn and £60bn next year, according to DB insurer Pension Insurance Corporation.
On Monday, Royal London confirmed it has entered the bulk annuity market with its first two buy-ins of external DB schemes, having already insured parts of its own staff pension funds. The entrance of a ninth insurer will increase the options available for schemes in a busy market, particularly smaller ones, as Royal London has said it will focus on transactions worth up to £500m.
