Pension Corp agrees largest UK buyout with Thorn

LONDON (Reuters) - Specialist UK pension manager Pension Corporation on Monday said it has completed the largest UK buyout with a deal covering 1.1 billion pounds of pension liabilities at electronics company Thorn.

It is Pension Corp's first 1 billion pound buyout since the firm was set up by a group of financiers led by Edmund Truell, the founder of private equity firm Duke Street Capital.

Companies have been drawn towards buyouts as the cost and risks of running defined benefit pension schemes, whereby benefits are fixed usually at a certain percentage of a person's final salary, have increased.

The buyout market has grown strongly over recent years but has stalled since the onset of the financial crisis.

The buyout of the Thorn pension fund will boost benefits by 5 percent for its 15,000 members, Pension Corp said.

A spokesman for the company said the pension scheme had built up cash in excess of that needed to cover standard benefits as a result of "prudent management."

"As part of the winding-down process the sponsoring company, Thorn, agreed the scheme could use the money in this way," he said.

Chris Martin, chairman of the trustee board for Thorn, said: "At a very challenging time in the investment markets, Pension Insurance Corporation was able to protect members' final salary benefits while also providing a financial uplift."

(Reporting by James Molony; Editing by Rupert Winchester)