Paternoster negotiates £800m P&O pension transfer

by Gill Montia

Story link: Paternoster negotiates £800m P&O pension transfer

Paternoster, the company that specialises in acquiring final-salary company pension schemes, could be on the brink of the UK’s largest pension transfer.

The company is reported to have agreed the take-over of 11,000 pensions belonging to former employees of P&O, the shipping group, in a transaction that could be worth around £800 million.

It is understood that under the terms of the acquisition, P&O will continue to provide future benefits for scheme members who are still working (around 6,000 in total).

A number of other pension transfers are likely to take place before the end of the year, with Paternoster and Legal & General both said to be working on deals.

Companies are keen to offload their expensive end-salary pension schemes because of the impact of such liabilities on their balance sheets and events are being speeded along by the recent turmoil in the credit markets.

In addition, stock market volatility and increased life expectancy has made many companies eager to end responsibility for their defined-benefit funds.

Recently, Paternoster announced plans to acquire the £178 million pension scheme of Emap, the publisher, and the £150 million pension scheme of Lasmo, the UK oil exploration company.

In November, Mark Wood, the founder of Paternoster, predicted that £2 billion of UK pension assets would change hands before Christmas.