UK - Trustees of the Northern Rock Pension Scheme have confirmed they are actively seeking buyout quotes from insurance companies as part of a "review of various options".
The pension fund recently informed members an updated scheme valuation, following the financial crisis at the UK bank, had revealed a £100m (€135m) deficit in the fund, although it estimated the buyout deficit was even higher at between £150-200m.
Trustees claimed, at the time, the scheme was not yet at the point where buyout was the "appropriate solution" and instead requested the Board of Northern Rock, HM Treasury or the Bank of England to either make the pension scheme a secured creditor or to provide a similar guarantee to the one issued to retail depositors of the bank.
But at the Extraordinary General Meeting on January 15, Bryan Sanderson, chairman of the Board, refused to give a specific guarantee and following proposals for a new financing structure for the bank - which did not mention the future of the pension scheme - trustees have started to look at other options. [See IPE.com: Trustees await Northern Rock guarantee]
A spokesman for the pension scheme said: "The trustees have decided in the current circumstances it is appropriate to review various options for the scheme, and part of that is to seek buyout quotes, so that they are in the position to pursue the buyout route if necessary."
It is unclear which buyout firms have submitted quotes for the scheme, but the spokesman emphasised the initial approach to insurers is just one of a number of options and said "no decision has been made that this is definitely the route they want to take".
Elsewhere, Rank Group is reported to be in exclusive talks with investment bank Goldman Sachs about the buyout of its pension scheme, which has a surplus of £75m, and pension liabilities of approximately £650m.
The gaming group, which owns Mecca Bingo and UK casinos, announced in September that it was considering removing its pension liabilities, as the scheme is quite large in comparison to the market capitalisation of the company. [See IPE.com Bingo group confirms pension fund sale plans]
A spokesman for the Rank Group admitted since it announced its intention to look at the possibility of buyout it has "made progress in the discussions" although he refused to comment on the specific buyout firms involved.
"As we stated in our trading update in December we have been conducting active discussions with a number of interested parties with a view to transferring the plan's assets and liabilities to an insurer," he said.
"These discussions are progressing well, however the company and the trustees would only conclude such a transfer if it was in the best interests of the company and all stakeholders, including shareholders and pension plan members."
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