Paternoster, the insurance company that specialises in acquiring final-salary company pension schemes, is understood to have agreed to take over 11,000 pensions belonging to former employees of shipping group P&O.

The deal is thought to be worth £800 million, making it the UK’s biggest pension transfer. It follows Paternoster’s acquisition of the £178 million pension scheme of Emap, the media group, and more recently the £150 million pension scheme of Lasmo, the UK oil exploration company. Companies are increasingly eager to offload their expensive final-salary pension schemes because doing so takes the costly liabilities from their balance sheets.

The recent turmoil in the credit markets provided a further spur to companies to get rid of their pension obligations.

Under the terms of the agreement with P&O, it is believed that Paternoster will provide former employees currently withdrawing their pensions with future payments.

P&O will continue to provide future benefits for the scheme members who have yet to retire, thought to represent about 6,000 people.

The agreement, however, allows P&O to retain overall control of the pension scheme. It is believed that this was at the request of P&O Trustees who were unhappy at the prospect of a transfer of the entire scheme to a pension insurer.

P&O was bought last year by Dubai Ports World, owned by the Dubai Government, for £3.3 billion. At the time, P&O’s pension fund had a deficit of £200 million, which was protected through a one-off cash injection of £125 million by DP World, followed by further payments.

Emap’s disposal of its pension fund facilitated its sell-off plans. It is in the process of auctioning off its entire operations – broken up into radio, consumer magazines and trade publishing. The group was the UK’s largest listed company to hand over the assets and responsibility for its two in-house pension funds to a third party.

Many other companies want to end the relationship with their defined-benefit pension funds because of the uncertainty created by volatile share markets and rising life expectancy. Paternoster has also bought out small pension funds sponsored by Fiat and Texaco.

Last month Mark Wood, the founder of Paternoster and former UK chief of Prudential, predicted that £2 billion of UK pension assets would be bought out before Christmas.

But not all attempts are successful. A plan by Cable & Wireless to sell its £2 billion pension fund was thwarted this month by the high costs involved.

The telecoms group has told investors that the cost of offloading the scheme’s liabilities meant that the plan was unlikely to go ahead in the near future.

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