Merchant Navy pension fund frets over future of Old Section
UK - The head of the UK's Merchant Navy Officers' Pension Fund (MNOPF) has branded as "gut-wrenching" a mooted buyout and wind-up of the £3.3bn (€3.7bn) scheme's Old Section.
Speaking at the National Association of Pension Funds' annual conference in Liverpool, Andrew Waring said he "can't comment and won't comment" on such a decision by the fund's trustee being imminent.
His comments come after the MNOPF hosted a series of forums across the UK and contacted members of its Old Section - closed to new members since 1978 and subject to two separate buy-ins in 2009 and 2010 - informing them that the fund was "working to extend" the existing buy-in arrangement.
The letter seen by IPE in September did not explicitly state whether the proposed policy would be offered by Lucida, responsible for the £600m previously insured liabilities.
But it did say that, "given the right circumstances", a further policy could be in place by the autumn - allowing the Old Section to be wound up "in due course".
Waring told the NAPF conference yesterday that the fund was now "in a position to settle the liabilities" due to the section funding currently being 101-102% funded to an insurer.
However, the chief executive said in response to a question from IPE that "all sorts of wider issues" needed to be considered prior to a settlement being reached.
"Maybe the Merchant Navy Officers' Pension Scheme is a little bit unusual, but there is a very strong bond and affinity with our officers," he said.
"It's a bit of a club, it's something they like belonging to and they don't want to belong to an insurer and all of that that comes with it.
"It's intangible, it's hard to put a promise on that, but it's something that weighs heavily on the trustee's mind - how you can deliver the security of trying to protect some of the softer benefits that members value."
Waring said any decision to complete further buy-ins or enact a complete buyout would not be purely financial.
"When you get to this stage, it's a gut-wrenching decision that the trustee will have to take in this regard," he said.
"But [a buyout and wind-up] is something we are looking at, yes, and whether a transaction is imminent, I can't say, can't comment and won't comment."