On the go: The defined benefit scheme of the British Bankers’ Association has entered into a £95m buy-in agreement with insurer Aviva, covering 213 members’ benefits.
The comparatively slight transaction reveals ongoing appetite for bulk annuity insurers to write smaller contracts, after Wednesday saw the top end of the market roar back into action with a £650m buy-in for 3i.
The BBA scheme’s contract is still subject to a pricing adjustment “following data and benefit rectification”, but will cover the liabilities of approximately 213 members of the plan.
Run as a sole corporate trustee by governance firm Law Debenture, the scheme hedged any further volatility in the price of the contract by investing in assets acceptable for direct transfer to the insurer, known as a price lock.
Sean Burnard, sole trustee of the scheme, commented: “We firmly believe this full buy-in represents excellent value in context of a more secure future for BBA’s pension scheme members. When you consider the challenging times we find ourselves in, unprecedented in fact, we are very pleased to have been able to successfully transact accordingly.
“This is testament to extensive stakeholder management and a real lesson in positive collaboration between LawDeb as Sole Corporate Trustee, BBA, Aviva, LCP and Barnett Waddingham.
“Even through these volatile conditions, the price lock that we had in place with Aviva did what it was intended to do.”
Henrietta Royle, chief executive of the BBA, said: “We are pleased to have been able to deliver such a positive result for our members with a very strong and reputable insurance company.”
Meanwhile, Jamie Cole, head of bulk purchase annuity origination at Aviva, said:“This once again demonstrates that smaller schemes can access attractive pricing when they are well prepared and supported by an efficient process, even against the backdrop of recent market volatility.”
