Pensions Expert rounds up the latest bulk annuity deals, including a perfume company’s scheme and a double buy-in for accountancy and consultancy firm BDO.
First up, Aviva has insured the Quest UK Pension Scheme for £134m in a full-scheme buy-in.
The transaction covers more than 440 members and is the second time the scheme’s sponsor, perfume company Givaudan UK, has completed a deal with Aviva, having insured a separate scheme in 2021 for £64m.
Ian Messenger, chair of trustees for the Quest UK Pension Scheme, added: “Protecting our members’ benefits has always been the key objective for both the trustees and company, and full insurance has been our long-term target for a number of years.
“This has now been made possible by the detailed preparation and strong collaboration across all workstreams led by Aon, with legal advice from HSF Kramer. The result is a very good outcome for all parties – members, the trustees and the company.”
Christian Frener, head of global benefits at parent company Givaudan International, said: “We were pleased to work closely with the trustees through a joint working group to support the long-term security of members’ benefits. Over recent years, we have systematically reduced risk through asset de-risking and member options exercises.”
Frener added that the two buy-in deals, including the 2021 transaction, meant that the company has insured “the vast majority of Givaudan’s UK defined benefit pension liabilities”.
Accountancy firm BDO has insured two of its UK defined benefit pension schemes in a joint £60m deal with Just Group.
The BDO ES Pension Scheme and the BDO Pension Scheme have just over 1,000 deferred and pensioner members between them.
In a press release from Broadstone, the lead adviser on the deal, the consultancy said “significant work” was needed to “address some complex benefit specification requirements” following historic acquisitions and mergers.
The trustees established a joint working group with the sponsor, advisers and other parties to “ensure the transaction could be completed at reasonable cost”, Broadstone explained.
Alongside Broadstone, Osborne Clarke provided legal advice and Dalriada Trustees joined to provide professional trustee support to both schemes.
Christopher Rice, deal lead at Broadstone, said: “While all de-risking transactions require close collaboration, in this case it was particularly necessary given the requirement to resolve complex legacy benefits as well as delivering an affordable transaction for the sponsor.
“BDO and Broadstone go back a long way, so I am delighted that we could play our part in securing the benefits for all of the schemes’ members and find an excellent partner, in Just, for the future.”
Richard Faulkner, trustee chair for both schemes, added: “Once the sponsor indicated its desire to complete a buy-in, I was keen that we moved quickly and assembled a collaborative team to work efficiently to transact… It was a pleasure to work so collaboratively with our advisers and the sponsor to achieve the sponsor’s objectives and secure a great result for our members.”
Finally, textiles manufacturer John Cotton Group has completed an £11m buy-in for its UK pension scheme, also with Just Group as the insurer.
The deal insures 105 members of the John Cotton (Mirfield) Limited Retirement Benefits Scheme. Isio was the lead adviser, while Squire Patton Boggs provided legal advice to the trustees.
Alma Goyanes-Payne, deal manager at Just Group, said the transaction was “a great example of how smaller schemes are benefitting from a dynamic and flexible insurance market”. The insurer used its proprietary pricing service, Beacon, to help complete the transaction.
John Cotton MBE, life president of John Cotton Group and a trustee of the pension scheme, said: “As a family business with over a century of heritage, we take pride in fulfilling our obligations to current and former employees. This buy-in reinforces our commitment to responsible stewardship and ensures the scheme’s benefits are protected for the long term. I’d like to thank my fellow trustees and our advisers for their dedication in achieving this outcome.”
