Technology paves the way for Lehman Brothers pensions settlement

The end of the world's largest corporate insolvency has moved one step closer after administrators to failed banking giant Lehman Brothers brokered a £675m ($1.025bn, €911.5m) pensions deal.

PwC, which is handling Lehman's administration in Europe, today said that pension provider Rothesay Life will underwrite the bank's entire pension pot, meaning 2,250 staff will have their future pensions paid in full.

Rothesay is co-owned by Goldman Sachs, Blackstone and Singapore's sovereign wealth fund GIC.

Paul Kitson, partner at PwC, hailed the use of technology in getting the deal done.

"The use of technology throughout the process was integral. We used Skyval, PwC's pensions analytics software to obtain accurate insurer pricing and then to track these prices through a period of volatile market conditions.

"This real-time analysis was also the basis for a very successful asset hedging strategy meaning that the deal stayed firmly on track during a period when falls in interest rates impacted buy-out affordability for most UK pension schemes," he said.

Last year a £184m deficit was plugged in the scheme after five companies within the failed bank agreed to a settlement brokered by The Pensions Regulator and trustees. Today's announcement marks the conclusion of that process.

Lehman's collapsed in 2008 with assets of $639bn and debts of $613bn.

PwC has already returned almost £35bn of cash and securities to creditors, although it is thought that the administration will take many more years to complete.