By Sarah Mortimer
LONDON, July 9 (Reuters) - Citigroup has shiftedresponsibility for paying the pensions of 20,000 past andpresent staff of EMI Group to Pension Insurance Corporation in alandmark deal relieving the bank of up to 1.5 billion pounds($2.2 billion) of liabilities.
The bank, the latest employer to insure against lengtheninglifespans which impose hefty extra costs on retirement funds, ispaying the specialist insurer an undisclosed fee in the largestUK pension risk transfer to date, Citi and PIC said on Tuesday.
The deal is the biggest since Legal & General tookon 1.1 billion pounds of pension liabilities from the T&NRetirement Benefits Scheme in 2011, according to data fromTowers Watson, which advised the trustee for the EMI deal.
Citigroup seized the music company in February 2011 fromBritish financier Guy Hands after the private equity firm, TerraFirma Capital Partners, defaulted on its loans and was unable tosupport EMI's debt load.
Citigroup eventually sold EMI in pieces in 2011, but keptthe pension fund to help facilitate the other sales. The dealwith PIC, known as a 'buyout transaction', means all the 20,000members 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 theirbenefits have been secured in full with PIC; as a trustee, fullysecuring benefits is the ultimate goal," Clive Gilchrist ofBESTrustees and chairman of the trustee company that manages theEMI pension scheme, said in a statement.