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The trustees of the MGN Pension Scheme have completed a £150m pensioner buy-in. The scheme provides benefits for former employees of news publisher Reach, previously Mirror Group Newspapers.
The scheme is known in the industry and beyond since former Mirror Group owner Robert Maxwell stole millions from it. The case ultimately led to the Pensions Act 1995, including the creation of the predecessor organisation of the Pensions Regulator.
In March, TPR published an intervention report after the trustees and sponsor failed to agree on the 2019 triennial valuation. Following TPR’s engagement, Reach committed to injecting an extra £25.5m over five years by increasing deficit recovery contributions to £46m a year, up from £41m.
The buy-in with Just Group is the scheme’s first and covers about 1,300 pensioners. Completing in November last year, it was structured so as to make sure any future transactions can be done efficiently.
Trustee chair Quentin Woodley said the buy-in was a significant step towards the goal of providing long-term security to members.
“LCP ran a thorough selection process to help the trustee choose Just and we worked closely with the sponsor to agree a transaction structure that achieve all parties’ objectives,” Woodley added.
The market continues to be very active, with strong competition for schemes of all sizes, said LCP partner Charlie Finch. He said Just met the key selection criteria for the MGN trustees, calling them “pragmatic and commercial in their negotiation approach”.
Kishan Radia, business development manager at Just Group, said: “We look forward to working in partnership with the scheme’s trustees on their derisking journey over the coming years. The insurance derisking market is working positively for schemes of all sizes, and Just is delivering an outstanding service to small schemes, large schemes and everything in between.”
Just, which tends to focus on smaller schemes, signed 129 transactions last year, calling it a record for the industry. It reported DB sales of £4.28bn, a 43% increase in the £3bn in 2023.
How is the derisking market developing given there will soon be an option for sponsors to access surplus early?
