UK - The Trustee of Uniq pension fund has completed a £830m (€967m) buy-in deal with Rothesay Life, aiming to guarantee members benefits at least equal to those offered if the scheme was forced to join the Pension Protection Fund (PPF).
Uniq's pension scheme was last year subject to protracted funding negotiations between its sponsoring company and the Pensions Regulator over an estimated £400m deficit that dwarfed the sandwich maker's market capitalisation.
Earlier in the year, it was given permission for a debt-for-equity swap, transferring a 90.2% stake in the company to the scheme, with Irish rival Greencore bidding £113m in July to buy the stake.
The trustee put the buy-in out to tender, with consultancy LCP advising on the transaction and designing the structure that was later agreed with Rothesay Life.
Chris Martin, the scheme's trustee, said: "Since the deficit-for-equity swap earlier this year, our main objective has been to secure - with an insurance company - benefits at least equal in value to PPF compensation with the possibility of a top-up above that level.
"The policy structure designed by LCP and secured with Rothesay Life is an important stride in realising this objective on behalf of the 20,000 members of the Scheme," he added.
Richard Mills, partner at LCP added that the policy with Rothesay allowed for "significant" flexibility to increase benefit payments if such a move proved possible.
He said further: "With this milestone transaction, the Trustee was able to lock in at an early stage the scheme's recent asset performance against the backdrop of considerable economic volatility."
Linklaters advised the trustee on the legal implications of the transaction.
The transaction is one of many such insurance deals struck in recent weeks' to reduce defined benefit (DB) schemes risk.
The Rolls-Royce Pension Fund last month completed a £3.5bn longevity swap with Deutsche Bank, while broadcaster ITV concluded a similar deal over £1.7bn in late summer and Trustees of the ITB pension fund agreed a £150m buy-in a few weeks later.
However, Aviva has previously warned that no buyouts ever achieve best value and that two-thirds of planned transactions fail.