Engineering service firm, Renew, has completed a buy-in for its Lovell Pension Scheme with an unnamed specialist insurer.

As reported by our sister title, Pensions Age, the trustee of the scheme agreed the deal on 26 November for the £197m scheme.

The insurer will take on the investment and funding risk of the scheme, securing the benefits of its pensioner and deferred members.

Renew remains legally responsible for the scheme.

Following the transaction and two other previous buy-ins, in 2011 and 2016, all the Lovell Scheme’s liabilities will now be matched with corresponding annuities.

No further contributions to the scheme are expected, although the firm’s board is investigating the opportunity of diverting contributions to the Lovell Scheme to another of its defined benefit schemes, the Amco Scheme.

Renew hopes that diverting contributions will enable the Amco Scheme to fully buy-in its liabilities over a shorter time scale than had previously been envisaged.

Its directors estimated that diverting the equivalent of one year’s worth of contributions from the Lovell Scheme to the Amco scheme was likely to be sufficient to secure a buy-in of its remaining liabilities.

Commenting on the deal, Renew CFO, Sean Wyndham-Quin, said: "We are very pleased that the trustee of the Lovell Scheme has completed the recent buy-in with a specialist insurer.

“This transaction significantly de-risks the group's balance sheet, further reduces the group's pension exposure risks and improves the group's cashflow in the medium term.

“We are now focused on trying to fully buy-in our liabilities with the Amco Scheme to further reduce the group's pension exposure in line with our strategy."

The Lovell Scheme buy-in will be completed by using its assets to purchase annuities from the specialist insurer that match corresponding pension liabilities, where the annuity policy remains an asset of the Lovell Scheme.

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