Merchant Navy Officers Pension Fund

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11Dec17

MNOPF announces £490 million buy-in

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The MNOPF Trustee secures £490 million of members’ benefits through a buy-in agreement with Legal & General.

The Trustee’s Mission Statement goal is to secure the Defined Benefit (DB) Section benefits and to ensure the long-term sustainability of the Money Purchase Section.

On 5 December, an important step was taken towards achieving this goal when the MNOPF Trustee secured £490 million of members’ DB pension benefits through a buy-in agreement with Legal & General.

The announcement follows a £1.5 billion longevity insurance transaction covering the benefits of the Fund’s “New Section” members in 2014, and the new buy-in arrangement covers all the Fund’s retirees since that date. This means that the benefits of all current pensioners are now insured against the risk that members are living longer and, therefore, the MNOPF is paying their pensions for longer (the longevity risk).

Rory Murphy, MNOPF’s Trustee Chair, said:

“This buy-in enables us to more effectively manage the risks faced by the Fund as a whole. It is also good news for employers in the maritime and shipping industry, who have already saved many millions in deficit contributions over recent years as a result of our improved funding position.”

“There is also a positive message here for the wider pensions community. A well-run fund, with strong governance and expert advisors, can deliver valued and sustainable benefits to its members while successfully managing the risks and costs faced by its employers.”

Chris DeMarco, Managing Director of UK Pension Risk Transfer for Legal & General said:

“We are delighted that the MNOPF Trustee chose to work with Legal & General and ultimately secure their members’ benefits with us. Our relationship with the Trustee has been a long-standing one and we are pleased to be able to assist them in the next stage of their de-risking journey.”

Andy Waring, Chief Executive of the MNOPF, said:

“Securing the benefits of our members has always been a significant part of the MNOPF Journey Plan. Our next milestone is to promote and grow the Ensign Retirement Plan, so that we can provide the same security in retirement for the next generation of maritime employees.”

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