Tactica to provide pension deficit cover

by Gill Montia

Story link: Tactica to provide pension deficit cover

Stefan Allesch-Taylor, the entrepreneur and financier, has formed a joint venture with Sir Peter Burt, former chief executive of Bank of Scotland, to offer companies insurance cover for their pension deficits.

They are launching a new company, Tactica Insurance, which will be headed by Wai Au, a former deputy chief executive of Barclays’ British retail banking operations.

Initially Tactica aims to raise £1 billion in equity and will then work to a full listing on the London Stock Exchange, hopefully within three years.

Once operational, Tactica will guarantee the liabilities of a pension scheme over 10 years.

The pension scheme will choose the amount of liability cover it needs and an equivalent sum will be invested in a policy managed by Tactica.

Tactica will then guarantee the cash flow needed to make payouts from the pension scheme.

After 10 years, the guaranteed liabilities held by Tactica will be returned to the pension fund.

This form of insurance is designed to reduce the problems faced by companies with large pension schemes.

When financial markets are volatile, it is often difficult for them to of match assets to future debts.

For example, In July of this year, the UK’s 200 largest pension funds had a combined deficit of £13 billion, whereas in the previous two months, the schemes had shown a collective surplus.

Tactica claims to be the first company offering an insurance solution to pension fund deficit.

In recent years other companies have been set up to provide solutions but their models have, in the main, offered to buy out assets and liabilities for a premium.