UK – The pension fund of an insolvent retailer has agreed a £160m (€190m) buy-in with Pension Insurance Corporation to secure benefits above the levels offered by the Pension Protection Fund (PPF).

Trustees for the First Quench Pension Fund said the buy-in would see benefits equal any PPF compensation, but added that there was likely to be a "material uplift" once all work associated with the transaction had been completed.

Chris Martin, managing director of Independent Trustee Services and scheme trustee, said the transaction was "very positive" for scheme members.

"Whilst members will not receive their full fund benefits, the outcome should mean that, overall, the fund can pay materially more than PPF compensation," he said.

"We are now working towards delivering certainty to all members in terms of the uplifted benefits they can expect to receive."

KPMG acted as joint administrator for the insolvent company and the trustee in respect to assets held in escrow, while LCP advised the trustee on the buy-in.

In other news, Aon Hewitt has urged small pension funds to consider medically underwritten annuities in place of a bulk annuity transaction.

The consultancy noted that the "rapidly developing market" currently only had four insurance companies offering the annuity, and said funds should act soon to achieve favourable pricing.

Dominic Grimley, principal consultant within the firm's risk settlement group, said the current lack of profile for the market would help funds achieve the best deal.

"It is unusual for small schemes to have the best opportunities, but, as the market begins to gain momentum, providers are keen to gain a foothold and prove the concept – and that can lead to the kind of attractive pricing that is currently available," he said.

"This reflects the providers' desire to develop the market – and potentially has no impact on cash funding requirements."

For more on medically underwritten annuities, see the Special Report on longevity in the current issue of IPE.