Metal flow engineering company Vesuvius has extended its pensioner buy-in arrangement with Pension Insurance Corporation (PIC).
In an announcement issued by the company on Monday morning, the company stated that the trustee of the Cookson Group Pension Plan, which is the responsibility of Vesuvius, had signed a further pension insurance buy-in arrangement with Pension Insurance Corporation.
Under the latest agreement, UK Plan members who retire in each of the next three years will have their pensions insured on agreed terms.
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The transaction follows an earlier agreement signed in July 2012, of a pension insurance buy-in agreement with PIC covering the existing UK Plan pensioner liabilities which then represented some 60% of the total UK Plan liabilities.
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Under the latest agreement, the first tranche covering members retiring between July 2012 and December 2013, will be insured in 2014 based on December 2012 market rates.
The insurance policy covers up to £30m of liabilities, with the future premium payments to be met from the existing assets of the UK Plan.
Chris O'Shea, Chief Financial Officer of Vesuvius, said: "De-risking the UK plan in this way, by removing the inflation, longevity and interest rate risks for the insured liabilities, will reduce still further the level of volatility to which Vesuvius is exposed in future pension funding costs through its sponsorship of the UK Plan.
"This latest buy-in agreement, which results in around two-thirds of the UK Plan being covered by buy-in agreements with PIC, represents a further demonstration of the company's intention to work with its advisor, premier, and the trustee to de-risk the UK Plan in a managed way."
Jay Shah, Co-head of Business Origination at Pension Insurance Corporation, said: "We are proud to have been able to help the trustee secure the pensions of future retirees, a structure which has worked extremely well for other clients. We believe that by locking into pricing for 2014 today, the trustee and Vesuvius have been forward thinking and proactive in managing its pension plan risk."
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