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IPE special report May 2018

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Paternoster closes largest buyout yet

UK - The shipping group P&O has today announced has paid £800m (€1.11bn) to transfer its pension liabilities of existing pensioners to UK pension buyout company Paternoster.

This is believed to be the largest deal to be made so far in the fledgling buyout sector.

A spokesman for DP World, the Dubai shipping giant which took over P&O in March last year, confirmed to IPE under the deal, Paternoster will take on the liabilities of P&O's £1.2bn closed defined benefit scheme.

The deal sees P&O delivering around £800m of its bond portfolio to Paternoster in return for it assuming those liabilities, while P&O will retain overall control of the scheme.

"Nothing else is being transferred. The administration of all benefits and payment of pensions will remain with MNPA Ltd and the trustees retain control," the spokesman said.

According to P&O, this is preferable than a transfer of the entire scheme.

P&O will itself provide for the future benefits of employees who have not yet retired.

The scheme was under-funded until DP World took over P&O last year.

Regular top-ups to the pension pot have seen the fund reach a well-funded level.

Earlier this week, Paternoster revealed it had acquired the £150m pension plan Eni Lasmo, the UK oil exploration arm of Italy's Eni SpA.

If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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