Wood Group trustees explore buy-in
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The defined benefit pension scheme of Wood Group, the Scottish engineering firm being bought by Dubai company Sidara, is exploring the option of a buy-in.
Aberdeen-based Wood Group’s takeover by Sidara is set to go through this week after the Court of Session gave the green light last summer.
The pension scheme trustees of the £1.9bn DB fund have been keeping a close eye on the developments with Sidara, they said, and continue to take covenant advice.
In the meantime, they are exploring the option of a buy-in as they discuss long-term solutions with the sponsor. The DB plan was 106% funded at its last full valuation in 2023, and this was estimated to have risen to 110% in 2025.
“This approach could provide additional security for members’ benefits as it would reduce further the Plan’s reliance on the company for financial support,” the trustees said, and mentioned that a buy-in would probably lead to a buyout.
“Exploring buyout has always formed part of the trustee’s long-term strategy to protect members’ benefits, and the plan’s strong funding position has now made it feasible to examine in detail whether to take the first step, namely undertaking a buy-in,” the trustees noted.
In terms of pre-97 accrual, the three former sections of the scheme – Amec, Foster Wheeler and John Wood – have split this into two elements, consisting of a part with discretionary increases and one with fixed 3% annual uplifts.
A year ago, the DB scheme’s assets were invested about 95% in bonds and 4% cash and other assets, with the remainder in property and private equity.
The change of ownership comes after the Financial Conduct Authority recently fined Wood £13m for mis-stating its financial results.
Aberdeen-based Wood Group’s takeover by Sidara is set to go through this week after the Court of Session gave the green light last summer.
The pension scheme trustees of the £1.9bn DB fund have been keeping a close eye on the developments with Sidara, they said, and continue to take covenant advice.
In the meantime, they are exploring the option of a buy-in as they discuss long-term solutions with the sponsor. The DB plan was 106% funded at its last full valuation in 2023, and this was estimated to have risen to 110% in 2025.
“This approach could provide additional security for members’ benefits as it would reduce further the Plan’s reliance on the company for financial support,” the trustees said, and mentioned that a buy-in would probably lead to a buyout.
“Exploring buyout has always formed part of the trustee’s long-term strategy to protect members’ benefits, and the plan’s strong funding position has now made it feasible to examine in detail whether to take the first step, namely undertaking a buy-in,” the trustees noted.
In terms of pre-97 accrual, the three former sections of the scheme – Amec, Foster Wheeler and John Wood – have split this into two elements, consisting of a part with discretionary increases and one with fixed 3% annual uplifts.
A year ago, the DB scheme’s assets were invested about 95% in bonds and 4% cash and other assets, with the remainder in property and private equity.
The change of ownership comes after the Financial Conduct Authority recently fined Wood £13m for mis-stating its financial results.
Wood Group has been contacted for comment.
