Aberdeen City Council Transport Fund completes first buy-in

The fund, part of the £4.4bn North East Scotland Pension Fund, almost tripled in size after merging with the Strathclyde Pension Fund No.3 Fund at the end of 2019.

Ian Hodgson, group pensions manager of FirstGroup, said that the “buy-in is the culmination of a project to sustainably derisk our Scottish Local Government Pension Scheme funds”.

“Transactions with the insurance market are not commonplace in the LGPS, and we are grateful to both Rothesay and the fund for their work in making this an attractive [derisking] option for employers and funds alike.”

Mercer Investment Consulting advised the fund on the transaction and Brodies provided legal advice. Linklaters provided Rothesay with legal advice.

Roisin O’Shea, business development at Rothesay Life, said: “Despite all the uncertainties last year, we saw a continued focus on derisking from pension schemes, with 2020 looking to be the second-largest year for the market.”

Indeed, derisking continues to be a popular strategy for UK pension funds. Recently, the £203.7m Lovell Pension Scheme completed a £110m buy-in with Rothesay.

With the Legal & General Assurance Society, the Legal & General Group UK Senior Pension Scheme completed an assured payment policy transaction of roughly £400m, and chemical company Evonik UK concluded a £544m full buy-in for four of its UK pension schemes.

The £30.8m Marie Curie Cancer Care Pension Scheme also concluded a full-scheme bulk annuity transaction worth around £30m with L&G.

This article originally appeared on mandatewire.com