Supermarket chain Morrisons has secured a £270m buy-in with Aviva, insuring the RSP Section of the Morrisons Retirement Saver Plan.
The deal was completed in March and covers 32,000 deferred members of the retailer’s cash balance plan.
In addition to the buy-in, Aviva also underwrote a “winding-up lump sum” exercise for approximately 30,000 pension scheme members. This enabled members to take their benefits as a one-off cash payment rather than take a regular retirement income.
Aon was the lead adviser to the trustee board on the transaction, with legal advice provided by Clifford Chance. DLA Piper advised Aviva.
Steve Southern, a professional trustee at Vidett and chair of the trustee board, said: “Securing members’ benefits in full, while offering eligible members the option of a winding-up lump sum, means we can provide both security and flexibility - an excellent outcome.
“We are delighted to have achieved this, which is a testament to the hard work over the past few years to meet our de-risking goals, alongside Aviva’s willingness to deliver a bespoke solution.”
John Baines, a senior partner at Aon, added that the deal required “meticulous planning and creativity” given the “highly unusual” nature of the pension scheme.
“This demonstrates that, even in a busy and competitive market, great results can be achieved where all parties commit to collaborating on complex and innovative transactions,” Baines said.
This latest transaction is the third buy-in Aviva has provided to pension schemes sponsored by the Morrisons group, the insurer said.
According to the supermarket chain’s latest annual report, for the 12 months ending 29 October 2023, Morrisons’ main defined benefit scheme was almost entirely secured through buy-in contracts. Of the £2.8bn in assets, £2.4bn was attributed to annuity policies.
