Pensions Expert rounds up a number of defined benefit (DB) bulk annuity deals from the past fortnight, ranging from £4m to £525m in size, with around 9,000 members’ benefits secured in total.
In this update:
Peel Ports anchors DB scheme with PIC
Pensions Insurance Corporation (PIC) has completed a £230m buy-in to secure around 2,000 members of the Peel Ports Final Salary Pension Scheme, sponsored by the Peel Ports Group.
The members include former dockworkers from across the UK, including Merseyside, Manchester, Clydeport in Glasgow, and Sheerness in Kent.
Amanda Willis, chair of the trustee board and group treasurer at Peel Ports Group, said the full scheme buy-in was a “long-standing ambition” for the trustees and praised PIC’s member service as a “key factor” in the decision to transact.
Willis also cited a previous transaction from 2017, when PIC insured the Former Registered Dock Workers Pension Fund through a £725m buy-in.
Matt Richards, head of origination structuring at PIC, added that building on existing relationships was “a core part of our strategy”.
LCP’s Ken Hardman, who advised the trustees, said: “This transaction once again demonstrates the value of a joined-up approach between the trustees and the scheme sponsor, with all parties setting clear objectives at the start of the process and working closely together to achieve a successful outcome.”
Legal advice was provided by CMS, working with PIC, and to the trustees by Gowlings.
Construction giant Skanska converts longevity swap to buy-in
Standard Life has insured the Skanska Pension Fund through a £525m buy-in, covering approximately 5,500 members. The transaction included the conversion of a longevity swap, which it has held with Zurich Assurance since 2017.
Harvey Francis, chair of the trustee board for the Skanska Pension Fund, said the deal was the result of “many years of careful management of the fund’s assets and liability risks” in collaboration with advisers as well as the UK sponsor and ultimate parent company, Sweden-based Skanska.
Meliha Duymaz, Skanska UK’s chief financial officer, added: “This purchase of a buy-in insurance policy with the assets of the fund has provided an excellent outcome for our pension fund members and the company. We have worked diligently with the trustees to achieve this position and are proud to have secured the members’ benefits for the long term while removing a significant risk from the company balance sheet.”
LCP was the lead transaction adviser and investment adviser to the trustee board. Legal advice was provided by Reed Smith, while Standard Life was advised by Debevoise & Plimpton and Eversheds Sutherland.
Fertiliser company secures two schemes with M&G buy-ins
M&G earlier this month announced two buy-ins worth a combined £265m for pension schemes sponsored by CF Fertilisers UK, the subsidiary of a Canadian fertiliser and chemicals company.
The transaction secures the pension benefits of more than 1,350 retirees and deferred members of the Kemira Growhow UK Limited Pension Fund and the Terra Nitrogen (UK) Limited Pension Scheme.
Capital Cranfield’s Susan Anyan, chair of the trustee board for both schemes, said: “We are delighted that a strong partnership between the trustee and the company has allowed us to significantly accelerate our shared ambition to future-proof members’ benefits. A high degree of collaboration across a strong multidisciplinary team enabled us to navigate a complex process to achieve this very positive outcome.”
Jo Carter of XPS Group, lead adviser on the transaction, added: “Due to the complexity of the schemes’ benefits, an approach combining XPS risk settlement, actuarial and administration specialists, coupled with robust project management, was crucial. This meant we could leverage strong insurer competition and achieve a great outcome for the trustee, the company, and most importantly, the members.”
The deal brings M&G’s total new business to £2bn since it re-entered the bulk annuity market in 2023.
Burges Salmon provided legal advice to the trustees, EY and Eversheds Sutherland advised the company, and CMS advised M&G.
Just tackles data issues for metals group scheme
Just Group has completed a full scheme buy-in for the Ridsdale Pension and Death Benefit Trust, sponsored by metals and materials company Goodfellow Cambridge.
The deal secures the benefits of 30 members and comes as the group is undergoing a restructuring process. In order to secure the transaction swiftly in line with the corporate-level work, the insurance company has agreed to take on elements of the data cleansing process on behalf of the pension scheme, including guaranteed minimum pension (GMP) equalisation. It has also agreed to finalise a buyout by the summer of 2026.
“We believe that insurers are in a unique position to take on more of the data cleanse and GMP work, and with greater control, we can commit to firmer timelines for reaching buyout.”
Rob Mechem, Just Group
Just said taking on data-related work is intended to help pension schemes “accelerate their journey to buyout and reduce the potential costs associated with lengthy administrative processes”. It expects more schemes to make use of this approach next year.
Rob Mechem, director of commercial at Just, said: “We believe that insurers are in a unique position to take on more of the data cleanse and GMP work and with greater control, we can commit to firmer timelines for reaching buyout… This transaction will demonstrate that delivering a quicker, more cost-effective buyout process can be achieved, with a commitment that the trustee and sponsors can rely on.”
PwC was the lead risk transfer adviser, with Gowlings providing legal advice to Aretas Trustees, which oversees the scheme. Just Group was advised by CMS and its internal legal team.
Aviva secures micro-scheme buy-ins with fast-track service
Aviva has finalised two buy-ins worth less than £6m each through a new “fast track” service.
Law firm Blake Morgan secured a full-scheme buyout worth £5.7m using the insurer’s Clarity service, covering 30 deferred members and 22 pensioner members.
Andrew Shaposhnikov, senior deal manager at Aviva, explained that the fast track feature was “designed to help well-prepared schemes move quickly and efficiently to buyout”.
Chair of trustees Max Craft added: “Having worked with [lead adviser] Broadstone for a number of years, we knew that we had high-quality data and, having completed GMP equalisation and supported by our in-house pensions expertise, we were in an excellent position to approach insurers with a view to completing a data cleanse rapidly.
“The fast track feature and our historical relationship made Aviva a natural choice, and we are impressed with how Aviva and Broadstone worked together on this transaction, which benefits members and Blake Morgan with a swift transition to buyout.”
Separately, Walsall-based steel company Watts Clift has also used the Aviva Clarity service to fast-track a £4m buy-in, covering the benefits of 51 members.
The Trustees also received advice from Albion EBC, Atkin Pensions acting as Scheme Actuary, and Pension Partners Law Limited.
Phil Kelly, associate partner and risk transfer consultant at First Actuarial, said the process was accelerated “dramatically”.
“For the Watts Clift scheme, buyout will be achieved in a matter of months instead of years,” he added. “For well-prepared schemes, this innovation represents a significant step forward in delivering member security quickly and efficiently.”
