Careful monitoring of the insurance market meant an ideal buy-in opportunity was identified 

The background

Henderson Group acquired Gartmore in early 2011 and, as part of the acquisition, took on responsibility for the Gartmore Pension Scheme. The pension plan had previously been closed to future benefit accrual and, after locking in a material gain in 2010 by switching out of swaps into gilts, the pension plan had assets valued at around £150m at the start of 2011.

Our solution

• Over 2011, the pension plan's gilts rose in value, whilst favourable conditions in corporate bond markets made insurer pricing increasingly affordable
• After a feasibility study in late 2011, the Trustees worked with LCP to undertake a market review to insure all of the pension plan's liabilities. The quotations showed that the pension plan's assets were now almost sufficient to buy-in all of its liabilities
• The position improved further following a competitive selection process and the Trustees entered into exclusivity with Pension Insurance Corporation at the end of March 2012
• Against a backdrop of volatile markets, the buy-in contract was negotiated, agreed and executed by the Trustees within one week

The results

The Trustees achieved their objective of insuring their obligations to members in full through an insurance solution without requiring an additional payment to the pension plan from Henderson. Careful monitoring of the insurance market meant this was achieved much earlier than expected.