On the go: The £11.8bn Co-operative Pension Scheme’s £2.1bn Bank Section has completed a full £1.2bn buy-in with Rothesay.
According to an announcement from sponsor Co-operative Bank, the trustee of Pace has now successfully completed a full buy-in of the Bank Section, covering all liabilities for 2,474 pensioners and dependants and a further 6,531 deferred members.
The insurance policy was purchased using existing assets held within the section.
On December 12, shortly before the buy-in was agreed, Co-operative Bank chief executive Nick Slape said: “The bank is supportive of the strong stewardship and derisking actions planned by the trustee, which we expect would deliver a positive outcome for members, through offering enhanced protection of benefits.
“It would also reduce the bank’s exposure to the primary risks arising from the Bank Section of Pace, delivering value to our shareholders, further simplifying our business and preparing the bank for the next phase of our strategy.”
The completion of the deal is expected to avoid crystallisation of £52.5mn of pre-existing contractual commitments of the bank to provide additional funding to Pace, which are expected to end after 2024.
In 2020, the Bank Section signed a £400mn buy-in with Pension Insurance Corporation. As of April 5 2022, the policy was valued at approximately £355m by the scheme actuary.
The lead broker on the transaction was Aon, acting for the trustee. Legal advice was provided to the trustee by Linklaters and to Rothesay by Gowlings WLG. The bank was advised by XPS Pensions Group and Clifford Chance.
This article originally appeared on MandateWire.com
