Glasgow protective packaging firm Macfarlane Group announced the “de-risking” of the Macfarlane Group plc Pension & Life Assurance Scheme (1974) through the scheme’s purchase of a £53 million bulk annuity policy buy-in from Royal London.

“As a result of the buy-in, with the exception of any post buy-in adjustments referred to below, all the financial and demographic risks relating to the Scheme’s liabilities will be fully insured, with the policy paying a regular stream of income that matches the Scheme’s pension obligations to all members,” said Macfarlane.

“Subject to post buy-in data reconciliations and adjustments, the Group and the Scheme Trustees will have the option to proceed to a full buy-out and winding-up of the Scheme expected within two years, at which point it will be removed from the Group’s balance sheet.

“The Scheme is currently in surplus, and the Group is not required to make any cash contributions. If a surplus remains at buy-out following post buy-in adjustments, any excess funds will be returned to the Group, subject to deduction of tax. 

“If there is a deficit at buy-out the Group will be required to provide a matching cash contribution. It is anticipated that any surplus or deficit at buy-out will be no more than £1 million.

“The Group has no other defined benefit schemes.”

Macfarlane Group chair Aleen Gulvanessian said: “This positive outcome will de-risk the Scheme and is in the interests of both members and the Group.  This development has been achieved through constructive engagement between the Group and the Scheme Trustees over many years.”

Angela Campbell, chair of the Scheme Trustees, said: “We are pleased the Trustees, with the support of the Group, have been able to execute the buy-in transaction which meets our objective of securing the pensions of all members of the Scheme. 

“The buy-in does not change benefits in the Scheme and pension payments will continue to be paid each month in the usual way.”