A flurry of derisking transactions have been announced this week, revealing a busy end to the year for UK pension insurers.
Dutch airline KLM has landed a £240m buy-in for its UK defined benefit (DB) pension scheme with Rothesay.
The transaction insures 1,852 members of the scheme, roughly equally split between pensioners and deferred members. It was finalised in December.
Rothesay’s Roisin O’Shea, a member of the insurer’s business development team, said the deal was completed within two months of the trustees approaching the market, and two weeks after they signed exclusivity to Rothesay.
O’Shea added that there was a “significant pipeline of opportunities” for insurers to take on DB schemes.
Eimear Kelly, UK pensions partner at EY, which advised KLM, added: “This transaction demonstrates that executing a buy-in within an ambitious timeframe is possible while still achieving strong outcomes for all parties. Early preparation and Rothesay’s proven execution capabilities enabled the scheme to move quickly.
“Even in a busy market, schemes that are thoroughly prepared can confidently access the insurance market to protect their members’ pensions.”
Albert Smidt, who chaired the trustee board’s transaction committee, said: “The sponsor, KLM, has always been supportive of the scheme, even in times when it was in a less favourable condition. We prepared this buy-in on a short timescale, in close cooperation with the company and [with] the support of our advisers… As chair of the project team, I am particularly proud of the outcome and the smooth process we have been able to organise together. A big compliment to all involved.”
Capita Pension Solutions advised the trustees on the transaction, with Sackers providing legal advice. Rothesay received legal advice from Debevoise & Plimpton.
Vistry builds member security with triple buy-in
Pension Insurance Corporation (PIC) has insured three pension schemes sponsored by housebuilder Vistry in a £155m combined buy-in transaction.
The deal insures 1,671 members across the Bovis Homes Pension Scheme, the Galliford Try Final Salary Pension Scheme, and the Kendall Cross Holdings Limited Pension and Assurance Scheme.
Jake Stanbridge, origination actuary at PIC, said: “Multi‑scheme transactions require careful coordination; working closely with the trustees and advisers, we delivered a tailored solution that provides long‑term security for members.”
Ndapt was the professional trustee for the three schemes, and director Sarah Leslie said: “This transaction is a great result for our members and is testament to the highly collaborative approach between the trustee board, the company, PIC, and the schemes’ advisers.”
Vistry’s chief financial officer Tim Lawlor hailed the “productive and collaborative engagement” with the trustee board of the three schemes that led to the buy-in.
“This agreement secures the long‑term pension commitments made to our colleagues, former colleagues and their families, while significantly reducing risk and removing future pension‑related volatility from our balance sheet,” Lawlor said.
Herbert Smith Freehills Kramer advised PIC, while CMS provided legal advice to the trustees. LCP led the transaction.
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Just insures education institution’s scheme for £12m
Just Group has completed a buy-in with the pension scheme of an unnamed arts-based higher education institution. The deal secures the pension benefits of 155 pensioners and deferred members in a £12m transaction, supported by a cash injection from the sponsor.
Capital Cranfield was the sole trustee for the scheme, represented by Jacqueline Woods. Woods said the sponsor was “keen to capitalise on the scheme’s rising funding level”, but benefit complexities presented difficulties.
First Actuarial, the scheme’s adviser on the deal, worked with Just and legal adviser Arc Pensions Law to accommodate the scheme’s benefit structures.
Declan Keohane, partner and head of risk transfer at First Actuarial, said the benefits required “detailed preparation work and a tailored approach”, as well as “proactive coordination and robust project management”.
Alma Goyanes-Payne, deal manager at Just Group, added: “This transaction illustrates how even small schemes with complex needs can achieve their de-risking objectives and ensure an excellent member experience.”
