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Specialist insurer PIC has completed a £1.3bn of the Coats UK Pension Scheme, covering the pensions of 18,042 members.
To manage the scheme's complex illiquid asset holding, PIC received illiquid assets in specie and agreed a deferred premium. This will allow timely redemption of further illiquid holdings.
In addition, facilitated by upfront contribution from Coats, responsibility for the assets and liabilities was moved to PIC.
Furthermore, the scheme previously completed a buy-in in 2022, covering £350m of liabilities. This transaction covers the remainder of the scheme.
Chris Martin, Chair of the Trustee of the Coats UK Pension Scheme, and Executive Chair at Independent Governance Group, said: “This is a significant transaction for the Scheme members, who now all have their pensions guaranteed by a UK life insurance company, and for the sponsor, which has fully de-risked the pension scheme for which it is responsible. The Trustee is delighted to complete the transaction. I want to thank PIC for their innovative, flexible approach to addressing the complexity of the illiquid holdings, as well as our advisors LCP, Redington and Sackers for their support throughout. Critical to delivering this outcome and the continuity of service to members has been the outstanding team at the Coats Pensions Office.”
Jackie Callaway, chief financial officer at Coats Group, added: “Shareholder sentiment was overwhelmingly positive following the previous Scheme buy-in and we were therefore very pleased to be able to help facilitate this transaction. Our contribution neatly aligns shareholder interests, by removing sponsor responsibility for the Scheme’s assets and liabilities, with those of Scheme members, who now all have their pensions insured.”
Matt Richards, head of origination structuring at PIC, stated: “We are proud to have been able to complete this complex transaction, demonstrating our commitment to meet trustee needs in challenging circumstances. It was a pleasure to work with Chris and the trustee team on this transaction. One notable feature of this transaction was the active support from Coats as sponsor, reflecting their experience of positive sentiment achieved by aligning shareholder and Scheme member interests.”
PIC also completed a second buy-in with the trustee of the TotalEnergies UK Pension Plan for £1.2bn ($1.52bn).
The TotalEnergies deal with PIC is the largest completed buy-in so far this year.
It follows the Plan’s first buy-in with PIC for £1.6bn in 2014. PIC has now insured all £2.8bn of the Plan’s defined benefit liabilities.