The EMI Group Pension Fund secured a buyout with Pension Corporation last week. The buyout was worth GBP1.5 billion, which is considered to be the largest deal to date. In terms of bulk annuity deals, the deal also exceeded other deals. The recent GBP1.5-billion deal topped the GBP1.1-billion buyout deal between the Pension Insurance Corporation (PIC) and Thorn in the late 1980s, which was also sponsored by EMI.
The buyout covered all liability-related risk of 20,000 members of the scheme. In addition, exposure to the impact of any data error uncovered will not be felt by the sponsor.
Currently, the pension fund's sponsor was Citigroup. It gained sponsorship after selling Recorded Music and Music Publishing, two of EMI's businesses, in 2012. Citigroup, along with the trustees, brokered the deal with the PIC.
The deal finally secured the benefit of members. Given the turbulent history of the scheme, the deal was particularly interesting. In 2010, The Pensions Regulator was called by trustees to help settle a funding dispute with private equity firm Terra Firma.
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