SERIAL entrepreneur and financier Stefan Allesch-Taylor has teamed up with former Bank of Scotland chief executive Sir Peter Burt to launch a group offering companies insurance to cover their pension deficits.

Tactica Insurance aims to raise £1 billion in equity, one of the biggest fundraisings for a start-up. The group hopes to gain a full listing on the London Stock Exchange in three years.

It has also recruited Wai Au, a former deputy chief executive of Barclays’ British retail banking operations, as chief executive.

Under the insurance agreement, Tactica will guarantee the liabilities of a pension scheme over 10 years, based on international accounting standards such as IAS 19. The pension scheme chooses the amount of liabilities it wants to cover and a similar sum is switched into a policy managed by Tactica.

The insurance policy guarantees the cashflows needed to make payouts from the pension scheme. At the end of the 10-year policy assets equal to the guaranteed liabilities are returned to the pension fund.

The plans are designed to eliminate the problems faced by companies with large pension schemes of matching assets to future debts. This is particularly difficult when financial markets are volatile.

In July, Britain’s 200 largest pension funds had a combined deficit of £13 billion. The previous two months, the schemes had collectively been in surplus.

Tactica, which has designed a model using derivatives, claims it needs to make an annual investment return of 5.5% for the business to break even. Funds will be run by an independent asset manager. Firms will pay a flat annual fee of 1% of the value of the pension fund.

In the past two years, a series of firms, including Paternoster, led by former Prudential executive Mark Wood, have been set up to provide solutions to pension-scheme deficits. But these have largely offered to buy out assets and liabilities for a premium. Tactica claims it is the first to offer a solution using insurance.

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