The defined benefit (DB) pension scheme for the UK’s Apostolic Church has secured a £4m buy-in with Just Group, as the market for small bulk annuity transactions is expected to remain strong through the rest of 2025.
K3 Advisory, which was acquired by Isio earlier this year, led the buy-in for the Apostolic Church Staff Pension Scheme, which insured 51 pensioners and 12 deferred members.
The transaction required the merger of an unfunded top-up arrangement into the main pension scheme, according to K3.
Geoff Bollands, chair of the trustee board, said: “We are pleased to announce the completion of this buy-in. Achieving this result required a strong, cooperative effort between all parties. With K3’s guidance and the support of our advisers and insurer, we’ve delivered long-term security for all members of the scheme.”
Thomas Crawshaw, senior consultant and deal lead at K3, added: “This buy-in is a great example of what can be achieved through early planning, alignment of stakeholders and a proactive approach to risk settlement, particularly for smaller schemes navigating complex structures.”
It comes as research from consultancy group Broadstone has predicted a decline in the aggregate value of bulk annuity transactions for the first half of this year – but with appetite among insurers for smaller deals remaining strong.
“Derisking for smaller schemes continues to accelerate with the number of deals seeming to be keeping pace with growth in recent years.”
Chris Rice, Broadstone
While larger bulk annuity deals are often “back-weighted” towards the second half of a calendar year, Broadstone also highlighted financial market volatility as a reason for a subdued first half.
In addition, the Pension Schemes Bill has introduced new options for DB pension schemes to consider, including running on to produce and release surplus, as well as a potentially larger superfund market.
This has led some schemes to “wait and see”, Broadstone said, but it still expects several larger transactions to be completed in the second half of 2025.
Chris Rice, head of trustee services at Broadstone, said: “Derisking for smaller schemes continues to accelerate with the number of deals seeming to be keeping pace with growth in recent years. This reflects growing insurer capacity at this end of the market, meaning that schemes of all sizes can now look to secure a bulk annuity transaction…
“Some schemes may eschew the insurance market and look to run-on given more fluid access to surpluses and healthier funding conditions. However, we do not expect this to considerably change the dynamics in the bulk annuity market as there are enough sponsoring employers looking to remove the burden of their DB pension schemes.”
