Co-op buys in further £1bn of liabilities

Experts had predicted that the market for buy-ins and buyouts would see a greater focus on smaller transactions in 2020, but the Co-op's passing of £1bn in liabilities to PIC shows some mega-deals are still in the pipeline.

The transaction is the second tranche of members covered by a buy-in for the Pace DB scheme, and will pay pensions for members of the Co-op section of the scheme.

Chris Martin of Independent Trustee Services, the chair of the Co-operative Pension Scheme’s trustee, said: “This buy-in is another step in improving member security as the trustee continues to follow its long-term derisking strategy, and is a positive result for scheme members, the trustee and the Co-op. I want to thank PIC for their proactive and flexible approach to helping us complete this transaction. I’d also like to thank the Co-op team and our advisers Aon, Linklaters and Mercer.”

Gary Dewin, director of reward for the Co-op, said: “Our Pace pension scheme is one of the strongest in the UK and highly valued by its members. The purchase of Pace’s second significant insurance contract further protects members by strengthening the scheme’s position.”

Fewer multibillion bulk annuity deals are expected in 2020, with the number of smaller transactions set to increase, according to research from Willis Towers Watson. Deals are forecast to total around £30bn, down slightly from last year's record-breaking £40bn.