LONDON (Reuters) - British insurer Pension Insurance Corporation (PIC) has extended its insurance contract with two shipping trade groups to take on a further 9 million pounds of pension liabilities, following a 40 million-pound deal in January.
The UK Chamber of Shipping and the International Chamber of Shipping has transferred all of its pension liability risk to PIC for the current pensioners in the Trustee of the Chamber of Shipping Retirement Benefits Plan, which provides the pensions for the two trade associations, PIC said on Wednesday.
Pension funds are struggling to cope with the extra costs of people living longer in retirement and have traditionally shifted longevity risks to pension insurers, who then underwrite price-specific pension fund risk.
The shipping groups have shifted all of the pension liabilities from its schemes to PIC for a premium in the so-called “buy-out” deal.
The UK Chamber of Shipping represents 140 members from across the UK maritime sector, while the International Chamber of Shipping represents over 80 percent of the world’s shipowners and operators.
Reporting by Sarah Mortimer; Editing by Greg Mahlich