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Alcatel-Lucent UK scheme completes £300m buy-in

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The UK pension fund for Alcatel-Lucent has completed a £300m (€408.6m) buy-in, de-risking approximately one-third of its liabilities.

The French telecommunications giant’s scheme chose to de-risk its pensioner liabilities as part of a longer de-risking objective, according to a statement by Aon, which advised the scheme trustee.

Insured with Aviva, the transaction completed during the summer of 2015, accounting for the majority of the company’s business written over the first two quarters of last year.

By the second quarter of 2015, Aviva had completed 13 deals worth £407m, according to figures compiled by Aon Hewitt, with £405m across 10 deals written during the second quarter.

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Martin Couzens, chairman at Alcatel-Lucent Pension Trustees, said he was very satisfied by the security offered by the deal.

“We have obtained full insurance backing for most of our pensioners and even made a saving against our funding reserve,” he added.

“Overall, this takes us substantially closer towards our goal of full buyout.”

Dominic Grimley, principal consultant and risk settlement specialist at Aon Hewitt, said the deal was agreed after a “strongly contested” auction.

“Aviva has shown great flexibility to accommodate the scheme’s needs, and the trustees have acted extremely efficiently throughout to secure an ideal result for all parties in a short space of time,” he said. 

The transaction came amid a flurry of activity in the UK de-risking market, which exceeded £10bn in transactions last year, with a predicted boost of £5bn on the back of the introduction of Solvency II expected this year.

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