Merchant Navy Officers Pension Fund
- £680m bulk annuity covering over 34,000 members globally under an all-risks buy-out transaction.
- Joint project with the Trustee to wind-up the Old Section of the Fund and streamline policy administration before issuing individual policies to all members in July 2014 and completing the buy-out.
- Residual assets were used to give all policyholders a 2.2% uplift to their total pension.
Today’s announcement is good news for our members. It means that certainty and security over pension benefits have now been extended in full to all benefits of the Old Section through insurance policies. Our top priority in negotiating this arrangement has been to secure the benefits of all our members. This move not only achieves that goal, it also enables us successfully to manage the risks faced by the Fund as a whole, which is good news for employers too.Peter McEwen, MNOPF Chairman
The global distribution of Rothesay Life's policyholders from the MNOPF Old Section pension scheme
- The MNOPF is an industry-wide pension scheme established in 1937 to allow shipping companies to provide retirement and death benefits for their officers.
- The Old Section of the Fund was closed in 1978 with the New Section providing further accrual of benefits after 1978.
- The Trustee of the MNOPF had previously secured £600m of the Old Section’s pensioner liabilities through policies with Lucida (now L&G) in 2009 and 2010 --these policies covered 65% of each pensioner’s monthly payments.
- Further to this transaction, the Trustee purchased a £680m bulk annuity insurance policy with Rothesay Life after running an extensive competitive process.
This policy covered:
- The remaining 35% for the pensioners previously insured
- Liabilities for deferreds and any members who have not yet claimed their pension
- The cost of any corrections to benefits in the event of any errors.
Just prior to the completion of the wind-up of the Old Section of the Fund, surplus assets were used by the Trustee for the benefit of the members, purchasing an additional 2.2% uplift to all pensions from Rothesay Life.
- The Trustee was committed to winding up the pension scheme and the issue of individual policies.
- In conjunction with the Trustees of the MNOPF scheme, L&G and HMRC, Rothesay Life has built a unique administrative arrangement to provide a seamless member experience.
- All policyholders will receive a single pension payment and have one contact point for queries, even if they have pensions with Rothesay Life, L&G or the MNOPF New Section.
- This service was promoted during a series of 10 roadshows across the UK in 2014 where Rothesay Life met with policyholders to explain the changes – the feedback was overwhelmingly positive.
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