The latest headlines from the bulk annuities sector, including deals for Aviva, M&G, and Canada Life, as well as details of Just Group’s recent acquisition by Brookfield Wealth Solutions.
Aviva has completed a £100m buy-in transaction with the Iveco Limited Pension Scheme, securing the benefits of 225 deferred members and 1,127 pensioners.
The deal was completed last month and involved the trustees conducting a site visit to Aviva to discuss post-transaction member services. This reflects the growing importance of member support services and other non-financial factors in trustee boards’ decision-making, which has been highlighted in several recent bulk annuity market studies.
The scheme is sponsored by Iveco, a multi-national vehicle manufacturer. Robert Gerdes, the company’s head of rewards, said: “Supporting the long-term security of the scheme has always been a cornerstone of our people strategy and we have stood firmly behind that commitment over many decades through significant cash contributions in all economic conditions.
“It was always our intention to reach a position where the scheme could secure additional protection with an insurance company providing long-term, sustainable support for its members. I am proud that we have delivered on that ambition.”
David Archer of Zedra Governance, chair of the Iveco Limited Pension Scheme trustee board, added: “Our focus is always on protecting members’ interests, securing their benefits and providing long-term certainty. The professionalism, collaboration and shared approach shown by the entire team involved in this transaction were instrumental in delivering an excellent outcome for members.”
Alongside Zedra, Pi Partnership provided scheme secretary services. XPS Group was the de-risking adviser and Squire Patton Boggs provided legal advice.
Patrick Lloyd, transaction lead at XPS, said the transaction was “really challenging”, due in part to “tight timescales”, but the trustees were still able to attract interest from several insurers.
M&G facilitates £60m deal with illiquid asset purchase
Earlier this month, M&G announced the completion of a £60m buy-in with an unnamed pension scheme, covering more than 750 members.
The insurer’s £134bn With-Profits Fund helped facilitate the deal by purchasing an illiquid asset from the scheme. This meant the pension scheme was able to move quickly and secure a buy-in within six months of approaching the market.
Roger Mattingly, chair of trustees for the scheme and a professional trustee at Independent Governance Group, explained that the illiquid asset deal was “instrumental in achieving the objectives of both the trustee board and the sponsor”.
Callum Slattery, senior risk transfer actuary at Gallagher, the lead broker on the deal, added: “M&G demonstrated a willingness to understand the scheme’s specific needs and work creatively with the trustee board to address the challenge posed by the scheme’s illiquid assets. Their ability to craft a bespoke solution made them a natural partner for this transaction.”
Rosie Fantom, head of bulk annuity origination and execution at M&G, said: “By accepting the illiquid asset in-specie, in a mutually beneficial transaction, we were able to resolve a major obstacle for the trustee board, allowing the pension scheme and sponsor to reduce risks by insuring members’ benefits.”
Brookfield completes Just acquisition
North American financial services giant Brookfield has completed its acquisition of Just Group and appointed new members to the insurer’s board of directors.
Sir Nigel Wilson, former chief executive of Legal & General, is the new chair, replacing John Hastings-Bass. Sir Nigel has been joined by new independent directors Jon Bayer, Shashank Bhalla, Jennifer Gillespie, Arshil Jamal, and Frank Oldham.
Hastings-Bass said: “It has been a privilege to serve as chair of Just Group and to help guide the business for more than five years, with the support of our wider non-executive team. The acquisition of Just Group by Brookfield Wealth Solutions reflects the strength of the business we have built and the long-term value of our strategy.”
Michael Abramson, partner and risk transfer specialist at Hymans Robertson, said the Just acquisition was “an encouraging signal for the bulk annuity market”, adding “meaningful capacity”.
Another recent deal to be announced was Canada Life’s £40m full-scheme buy-in with a financial services sector pension scheme. The deal secured the benefits of more than 80 pensioners and 60 deferred members.
Hymans Robertson acted as lead broker on the deal and adviser to the scheme, while Stephenson Harwood provided legal advice to the trustee board.
Sam Warburton, risk transfer specialist at Hymans, said: “Strong collaboration across all parties enabled a smooth and efficient transaction, helping the trustees secure an excellent outcome in a busy year for the bulk annuity market.”
Canada Life’s Shreyas Sridhar, managing director for bulk purchase annuities, added: “This transaction was very swiftly completed thanks to Canada Life’s agile handling of bespoke buy-in arrangements combined with cross-party collaboration.”
