KPMG pulls off £150m pension buy-in for Dairy Crest

A deal which has secured a £150m pension buy-in for Dairy Crest, the UK's leading chilled dairy foods producer pension liability, was spearheaded by KPMG.

Backed up by Aon, Mercer and Clifford Chance, the firm led efforts to secure the insurance for the company from Legal & General Assurance Society Limited.

However, the policy only insures about half of the liability for pensions in payment at Dairy Crest, which owns household brands including Davidstow Cheddar, Clover and flavoured milk drink Frijj.

As at 30 September 2008, the fund had total liabilities of £658m on an IAS19 basis.

KPMG pensions partner Ben McDonald, said: 'We are pleased that a commercial deal could be struck that meets the long term objectives of both the company and Trustee, despite the turbulent times currently prevailing within financial markets.

'This transaction was slightly different to many others - insuring only part of the pensioner liabilities and being completed only a few weeks after receiving a suitable insurance quotation.'

'The policy covers around half of the Fund's liability for pensions in payment, providing flexibility for Dairy Crest and the trustee to explore further similar arrangements in the future.' Dairy Crest added.