Barnett Waddingham advises on insurance deal between Alitalia Italian Airlines Pension and Assurance Scheme and Pension Insurance Corporation
London, 15 July 2010 – Barnett Waddingham, the leading independent firm of actuaries and consultants, and Pension Corporation, the leading provider of risk management solutions to defined benefit pension funds, today announce that the Trustees of the Alitalia Italian Airlines Pension and Assurance Scheme (“the scheme”) have entered into a pension insurance buy-in with Pension Insurance Corporation (“PIC”) to stabilise the scheme’s funding position. The scheme is currently within a PPF assessment period following the Administration of Alitalia (the sponsoring employer of the scheme) in 2008. At the time the company collapsed the Italian Government owned 49.9% of the shares.
The scheme is significantly underfunded with a s75 (or buy out)
The scheme will transfer circa £53m of assets to PIC to secure its current funding position and provide a facility to improve and secure further funds if available in the future.
A pension insurance buy-in is a key step towards fully de-risking a pension scheme by reducing the overall level of pension risk and investment volatility.
Miles Buckinghamshire, of BESTrustees and Chairman of Trustees, said:
“With pragmatic advice from Barnett Waddingham, we are delighted to have entered into this innovative arrangement with PIC. It has allowed us to lock down our asset and liability position in volatile markets to the benefit of our members whilst we continue to vigorously pursue the Trustees’ claim in the Italian Administration court proceedingsin Rome”
Paul Jayson, Partner, Barnett Waddingham, said:
“This arrangement is a key step for the Trustees of the Alitalia scheme as they work their way through the PPF assessment period. We believe that this insurance policy reduces the risk to members’ benefits having captured a favourable position.”
Mitul Magudia, Pension Insurance Corporation, said:
“We’re pleased to have developed the right insurance solution for this situation. This builds upon our track record of offering bespoke solutions for trustees to help them secure member benefits for the long-term.”
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