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Ensign completes big DB derisking project

11 September 2013

Involved derisking Merchant Navy Officers Pension Fund

Read more: Ensign DB pension schemes Merchant Navy Officers Pension Fund Rothesay Life EDM Group

Ensign and Rothesay Life, Goldman Sach's fully-owned pension insurer, have completed a buy-in of the Merchant Navy Officers' Pension Fund (MNOPF), supported by data management specialists EDM Group.

The de-risking exercise was carried out by Ensign, MNOPF's scheme manager, and saw the scheme insure and transfer its liabilities to Rothesay Life. As part of the exercise, Rothesay Life required full member information to calculate individual liabilities. The buy-in is fully completed and the firms are working towards a buy-out which has yet to be completed.

EDM was hired to digitise and error-check the scheme's records, which stretch back to the 1930s, and were held in a number of formats – including paper, microfiche and microfilm rolls.

EDM Group’s CFO, Mark Jones, said: "EDM was delighted to work so closely with Ensign on this very important project and was particularly pleased to bring the project in ahead of the scheduled completion date.

"The DB pensions de-risking market is growing rapidly and we look forward to working with Ensign on future projects. Stakeholders such as scheme administrators, trustees, company CFOs and insurers all have a strong interest in the quality of pensions record keeping, and we know that EDM’s services, which help capture scheme information, can be crucial to the viability of de-risking."

Recent research by EDM shows two thirds of pension professionals believe de-risking activity will increase over the next five years, with almost a quarter foreseeing a 'dramatic' rise. However, EDM also found that very few – just 5% - of pension professionals believe the data held by defined benefit schemes to be 'excellent’.

Michael Mann, director of administration at Ensign, said: "We have worked in partnership with EDM to deliver one of the biggest pension scheme de-risking projects in Europe to-date.

"This was a major project for Ensign Pensions Administration, so having a partner that was truly flexible and could scale up and mobilise quickly was extremely important to us. EDM’s professionalism and approach to this work was excellent enabling us to achieve tight and demanding timescales."


  • The buy-in arrangement between the MNOPF and Rothesay Life was agreed by the scheme trustees after a great deal of research, discussion and due diligence. The arrangement not only secures members’ benefits, it makes them more secure. Insurers like Rothesay Life are regulated by the FCA, backed by the Financial Services Compensation Scheme, and have much more stringent capital requirements than pension funds. Hundreds of UK pension schemes have passed into the Pension Protection Fund, following the liquidation of their sponsoring employers, and in some cases pensions reduced. No insurers providing buy-ins have gone under and the benefits have been secured in full. The feedback from the numerous nationwide forums we have participated in suggests MNOPF members understand the rationale for the buy-in and are in agreement with it.

    Andrew Waring | 16 Sep 2013

  • There seems to be lots of back slapping and congratulations all round amongst the financial bodies involved. What does not appear is any reassurance to MNOPF members about security of future payments. Commonsense tells us that these institutions are doing this for the money i.e. making profits before any benefits are passed to MNOPF members. Scepticism and doubt remain over the actions of the MNOPF trustees.

    Peter Hewitt | 12 Sep 2013

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