LCP advises on £1.3 billion buy-in between Coats UK Pension Scheme and PIC
Pensions & benefits Pension risk transfer DB pensions
LCP acted as the lead transaction consultant for the £1.3 billion buy-in between Pension Insurance Corporation (“PIC”), a specialist insurer of defined benefit pension schemes and Coats UK Pension Scheme (the “Scheme”), covering the pensions of 18,042 Scheme members.
Transaction detail:
- To manage the Scheme’s complex illiquid asset holdings, PIC received illiquid assets in specie and agreed a deferred premium to allow timely redemption of further illiquid holdings.
- Facilitated by upfront contribution from Coats to move responsibility for the Scheme’s assets and liabilities to PIC.
- The Scheme previously completed a buy-in in 2022, covering £350 million of liabilities. This transaction covers the remainder of the Scheme.
Coats is a world leader in thread manufacturing and structural components for apparel and footwear, as well as an innovative pioneer in performance materials. These critical solutions are used to create a wide range of products, including ones that provide safety and protection for people, data, and the environment. Headquartered in the UK, Coats is a FTSE250 company and a FTSE4Good Index constituent.
LCP’s market leading Pension Risk Transfer team has advised on over 230 transactions in the last decade, from those under £100m to the largest and most complex deals in the market.
Chris Martin, Chair of the Trustee of the Coats UK Pension Scheme and Executive Chair at Independent Governance Group, said: “This is a significant transaction for the Scheme members, who now all have their pensions guaranteed by a UK life insurance company, and for the sponsor, which has fully de-risked the pension scheme for which it is responsible. The Trustee is delighted to complete the transaction. I want to thank PIC for their innovative, flexible approach to addressing the complexity of the illiquid holdings, as well as our advisors LCP, Redington and Sackers for their support throughout. Critical to delivering this outcome and the continuity of service to members has been the outstanding team at the Coats Pensions Office.”
