We helped Trinity Mirror complete multiple buy-ins to reduce pension liabilities

With ten DB pensions pension plans all closed to future accrual and £1.7bn of pension liabilities, Trinity Mirror needed an innovated approach to take down their pension liabilities.

The background

• £1.7bn of pension liabilities on its balance sheet at 31 December 2012 across ten pension plans
• Corporate strategy since the economic downturn in 2008 to pay down net debt through cashflow rather than drawing on the Group's banking facilities
• Parallel strategy to de-risk historic pension liabilities without affecting cash commitments to the pension plans
• All DB pension plans were closed to future accrual in 2010 and a programme of insurance buy-ins commenced in 2011

Our solution

• We helped them to identify carefully targeted buy-ins as a cost-effective way of reducing and controlling its pension exposure
• By the end of 2012, seven of the pension plans had completed buy-ins for total premiums of over £500m
• We negotiated two pensioner buy-in transactions as part of this programme, covering over £350m of liabilities
• Four of the smaller pension plans were insured in full, as part of an approach tailored to the circumstances of each plan

The results

Following the latest phase of insurance buy-ins in 2012, Trinity Mirror has now insured 25% of its pension obligations. This was achieved in parallel with a reduction in the Group's net debt by over £200m since 2008 and with little or no impact on pension contribution requirements. It was made possible by locking in high bond valuations to pay the buy-in premiums.