The Aon Minet Pension Scheme has completed its second bulk annuity insurance buy-in with Pension Insurance Corporation (PIC).

The latest deal covers around £210m (€269m) of pensioner liabilities, adding to its previous £100m transaction two years’ previous.

Aon Minet, an insurance brokerage company and part of the multinational Aon Corporation, and the trustees of the scheme re-selected PIC after a competitive tender process.

Sister organisation Aon Hewitt led the negotiation on behalf of the scheme, with legal advice provided by Hogan Lovells.

Robert Dickinson, chair of trustees to the scheme, said the £210m deal was the next stage in the scheme’s de-risking plan.

“I am delighted that, despite the turbulence in the markets during the past few weeks, we were able to move ahead with the transaction,” he said.

PIC actuary Uzma Nazir added: “The Aon Minet scheme trustees have taken further steps to de-risk.

“Doing this in tranches, rather than waiting until full buyout funding is achieved, is becoming an increasingly common approach.”

In other news, Aon Hewitt, has urged UK pension schemes to consider the use of escrow accounts as an alternative means of funding deficits.

Publishing a white paper, the advisory firm cited several “myths” over the use of escrows in pension scheme funding, hampering their use.

An escrow is a temporary account used between the sponsor and pension scheme, with funds held and taken on board by the scheme (if funding falls) or retained by the sponsor (if funding improves).

Lynda Whitney, partner at Aon Hewitt, said the use of escrows could be useful, particularly for companies with cash capacity but that do not want this tied up in a pension scheme, should funding improve organically.

The paper sets out to dispel other common misconceptions on escrows – the accounts are used only for cash, they are disliked by The Pensions Regulator (TPR), or they are expensive, or inappropriate for schemes in deficit.

“An escrow can have a role in either deficit management or the management of the risk of trapped surplus,” Whitney said.

“In relation to a deficit, it can bridge the gap between trustees and sponsor viewpoints on pace or level of funding.”