On the go: Aviva Life & Pensions UK has completed a £1.7bn bulk annuity buy-in of the Aviva Staff Pension Scheme.
Aviva will now insure the defined benefit pension liabilities of 4,300 deferred and 1,500 current pensioner scheme members, and remove the investment and longevity risk of these members from the scheme.
According to an Aviva statement issued today, the strong financial position of the scheme has led the trustee to complete their first buy-in as part of a long-term plan to derisk the scheme.
Commenting on the transaction, Brian Bussell, chair of the trustee of the Aviva Staff Pension Scheme, said: “The trustee is delighted to have entered into this first buy-in to help secure the benefits due to our members, working closely with our advisers and Aviva to do so.
“Combined with the existing longevity swap, this buy-in means that the scheme has now hedged a material amount of longevity and investment risk.”
Jason Windsor, chief financial officer of Aviva plc, added: “This transaction builds on the strong funding position of the scheme. This is a result of the years of joint stewardship between Aviva and the trustee in building the financial strength of the scheme.”
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The scheme trustee was independently advised throughout the process by Hymans Robertson, Linklaters and Redington.
Michael Abramson, partner at Hymans Robertson, said: “Despite political uncertainty and market volatility, 2019 has already proven a record year for the bulk annuity market, with total transaction volumes in excess of £36bn.
“Buy-ins such as these show how insurance can be a meaningful part of the derisking strategy for even the largest pension funds.”
