Pension Bonds


  • Pension deficit guarantee or letter of credit replacement
  • Local government pension guarantees

Best For

  • Large private sector employers with final salary pension schemes
  • Contractors or charities providing outsourcing solutions to local governments

Summary of Coverage

If you provide final-salary (also called defined benefit) pension schemes for your current or previous employees, you may find the mandatory actuarial review process declares your pension fund is in deficit, meaning that the expected future liabilities will exceed the value of the fund. This will require you to negotiate with the trustees of the pension fund and the pension fund regulators to resolve the situation.

One outcome may be that you must provide a guarantee or bond for an agreed period, pending additional funding being made, in order to eliminate the actuarial deficit.

Another scenario concerning pensions is to allow employees who were previously under local government employment to remain inside the local government final-salary pension scheme when the department or unit concerned is transferred to the private sector (for example, domestic refuse collection or highways maintenance). For this to happen, if you are the new employer, you will be required to post a local government pension bond.

Why Tokio Marine HCC?

Tokio Marine HCC is a leading specialty insurance group with offices in the United States, Mexico, the United Kingdom and Europe, transacting business in approximately 180 countries and underwriting more than 100 classes of specialty insurance. Our products and capabilities set the standard for the industry, and many of our almost 3,000 employees are industry-leading experts. Each of our highly entrepreneurial businesses are equipped to underwrite special situations, companies and individuals, and acts autonomously to deliver effective solutions. 
financial strength

Our financial strength ensures our clients will always be protected.

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holistic portfolio

Our holistic portfolio of products includes more than 100 classes of specialty insurance

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Tokio marine

Tokio Marine HCC is part of Tokio Marine, one of the largest P&C insurers in the world

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