| LONDON, July 9
LONDON, July 9 Citigroup has shifted
responsibility for paying the pensions of 20,000 past and
present staff of EMI Group to Pension Insurance Corporation in a
landmark deal relieving the bank of up to 1.5 billion pounds
($2.2 billion) of liabilities.
The bank, the latest employer to insure against lengthening
lifespans which impose hefty extra costs on retirement funds, is
paying the specialist insurer an undisclosed fee in the largest
UK pension risk transfer to date, Citi and PIC said on Tuesday.
The deal is the biggest since Legal & General took
on 1.1 billion pounds of pension liabilities from the T&N
Retirement Benefits Scheme in 2011, according to data from
Towers Watson, which advised the trustee for the EMI deal.
Citigroup seized the music company in February 2011 from
British financier Guy Hands after the private equity firm, Terra
Firma Capital Partners, defaulted on its loans and was unable to
support EMI's debt load.
Citigroup eventually sold EMI in pieces in 2011, but kept
the pension fund to help facilitate the other sales. The deal
with PIC, known as a 'buyout transaction', means all the 20,000
members of the pension fund will receive their full pensions.
Citi is no longer responsible for finding extra funds to
support scheme members who live longer than expected.
"I have written to the Fund members telling them that their
benefits have been secured in full with PIC; as a trustee, fully
securing benefits is the ultimate goal," Clive Gilchrist of
BESTrustees and chairman of the trustee company that manages the
EMI pension scheme, said in a statement.