Sea Containers 1983 Pension Scheme

Case Study

Key Facts:

  • £178m buy-out transaction for the Sea Containers 1983 Pension Scheme

  • The transaction secured benefits above Pension Protection Fund (PPF) levels for approximately 750 members

The transaction:

In 2008, the Pensions Regulator issued the first Financial Support Direction to this Scheme (and also to the Sea Containers 1990 Pension Scheme, another pension scheme sponsored by Sea Containers).

The Regulator subsequently approved financial support arrangements for both these schemes.

By 2017, the Scheme was in a position to afford to secure members’ benefits in excess of the PPF level. Consequently, the Trustees actively sought quotations from UK insurers for a bulk annuity buy-out.

In selecting a de-risking partner, the trustees were focused on three key outcomes:

  • Maximising the value to members – securing benefits as far as possible above PPF compensation levels, with the ability to then wind up the Scheme on that basis
  • Working with a financially strong de-risking partner – to give members certainty about their future pension benefits
  • Securing flexible implementation arrangements – to enable the Trustees to fulfil their legal responsibilities to finalise all member’s entitlements as quickly as practicable.

How did the transaction support trustees and members?

  • The Trustees, working closely with their advisers, selected Aviva as it provided the best overall combination of pricing and flexibility
  • Working closely with the Trustee team throughout, Aviva structured the bulk annuity to provide a ‘price lock’ to deliver economic certainty prior to transaction
  • The price lock, combined with the overall competitive pricing terms offered, helped to ensure the best possible outcome for members.

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