Chemicals manufacturer Huntsman announced Wednesday that it had completed a 205-million-pound ($278 million) pension risk transfer with M&G plc, insuring the liabilities for members of its defined benefit plan in the U.K.
The buy-in, completed in the first quarter of the year, will secure the benefits for more than 660 of the companies’ retirees and deferred pensioners. The liabilities of the plan will be transferred to Prudential Assurance Company Ltd., a subsidiary of M&G offering life and pension insurance solutions.
M&G, the trustee for the transaction, was advised by WTW as risk transfer adviser. Squire Patton Boggs and Eversheds Sutherland served as legal advisers. Mercer was the investment consultant for the transaction.
“[This transaction] sees the Prudential Assurance Company take on the future pension obligations of over 660 retirees and deferred pensioners of the Huntsman Pension Scheme giving them peace of mind that their pensions are in the hands of a 177-year-old institution who has been looking after pensioners and savers for generations,” said Kerrigan Procter, managing director of corporate risk solutions at M&G, in a statement.
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As corporate pension funds have seen their funding surpluses continue to increase, plan sponsors are increasingly looking to de-risk their portfolios and offload their liabilities to insurers. This has driven an increase in activity in the pension risk transfer market.
The U.K. PRT market saw approximately 50 billion pounds of transaction volume in 2024, according to a June life insurance market outlook from AM Best. The firm expects another 50 billion pounds in transaction volume this year.
According to Mbwl International, the U.K. saw more than 45 billion pounds in PRT volume across 294 transactions in 2024, a sharp increase from just over 10 billion pounds across more than 75 transactions.
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Tags: Pension Risk Transfer, PRT
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