The British Board of Agrément (BBA) has insured its defined benefit (DB) pension scheme through a £20m buy-in with Aviva.
The deal covers all 39 deferred and 82 pensioner members of the British Board of Agrément Pension and Life Assurance Scheme. The BBA provides construction product performance assessment, testing, and certification services.
Broadstone, which advised on the transaction, said the trustee board had been working towards a bulk annuity transaction for “a number of years” to ensure the scheme could act quickly once the deal was considered affordable.
“Favourable market conditions, employer contributions, and careful forward planning meant that we could enter into an insurance transaction very smoothly and much earlier than anticipated.”
Jonathan Hazlett, Open Trustees
Negotiating the deal involved “complex considerations”, Broadstone said, such as an ongoing salary link for some members and the need to model a “non-standard pension increase”.
Jonathan Hazlett of Open Trustees, who chairs the trustee board, said: “Being able to secure members’ benefits in full seemed a long way off a few years back.
“However, favourable market conditions, contributions from the BBA and careful forward planning to get ‘buyout ready’ have meant that we could enter into an insurance transaction very smoothly and much earlier than anticipated, notwithstanding the complications of an ongoing final salary link and some unusual pension increases.”
Mark Channon, deal lead and scheme actuary at Broadstone, said: “I have been involved with this scheme for seven years, becoming scheme actuary at a time when funding was very tight and a buyout seemed a long way off. It has been extremely rewarding to work with a highly engaged set of trustees who have worked hard to get the scheme to this point.”
Aviva and Broadstone are now working on a data cleanse ahead of a full buyout for the scheme.
