Renold de-risks £25m of pension liabilities

CHAIN manufacturer Renold has completed a medically underwritten insured buy-in which fully de-risks about £25m – or 25% – to its highest liability pension scheme members.

The transaction has no impact on the funding level of the scheme and did not require any additional contributions from the Manchester-based group.
 
The buy-in will be sourced entirely from a portion of the scheme’s holding of Index Linked UK Government bonds.

The most significant impact of the transaction is that the company is now fully protected from volatility in longevity, inflation and interest rates in respect of its members.
 
Chief executive of Renold, Robert Purcell, said: “The buy in of 25% of current pensioner liabilities is an important step in de-risking the group’s cash flows and balance sheet from the impact of volatility in pension liabilities.

“Re-building the Group’s balance sheet and closely managing our legacy pension obligations are important aspects of the group’s overall strategic objective to deliver sustainable gains in shareholder value.”