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Engineering company Renew has entered into a 'buy-in' agreement with an unnamed insurer for one of its defined benefit pension schemes.
Under the agreement, the insurer will take on the investment and funding risks of the £197 million Lovell Pension Scheme, although Renew remains legally responsible for the scheme.
It follows two previous buy-in transactions and means all scheme benefits are now matched with annuities.
Renew said the agreement also meant it did not expect to make any further material contributions to the scheme. Instead, it intended to divert planned contributions to its other defined benefit scheme, the £15 million Amco Pension Scheme, in an effort to achieve a buy-in.
Once the funding risk has been removed from both schemes there will be an immediate, material improvement to the group's cash flow, the company said.
Sean Wyndham-Quin, Renew's chief financial officer, said: 'We are very pleased that the trustee of the Lovell Scheme has completed the recent buy-in with a specialist insurer.
'This transaction significantly de-risks the group's balance sheet, further reduces the group's pension exposure risks and improves the group's cashflow in the medium term.
'We are now focused on trying to fully buy-in our liabilities with the Amco Scheme to further reduce the group's pension exposure in line with our strategy.'
At 8:27am: (LON:RNWH) Renew Holdings PLC share price was 0p at 448p