Technology giant ABB has insured its defined benefit pension scheme with Aviva, sealing a £700m buy-in for the ABB Plan.
The majority of the premium was financed through a £620m in-specie asset transfer of UK and US corporate bonds and UK gilts, according to a press release from the insurer.
The buy-in secures the benefits of more than 4,450 pensioner members and 2,900 deferred members.
Ricky Patel, partner at LCP, which advised ABB through the transaction, added: “ABB’s objective from day one was to reduce worldwide pension risk as part of its global strategy.
“As one of the largest defined benefit plans in the group, the UK buy-in is a significant milestone in achieving this objective, and we’ve thoroughly enjoyed advising ABB on all aspects – from the overarching strategy to the pricing, contract negotiations and asset transfer.
“As one of the largest defined benefit plans in the [ABB] group, the UK buy-in is a significant milestone in achieving this objective.”
Ricky Patel, LCP
“Now the buy-in is complete, ABB’s position is future-proofed across key areas, and the residual pension exposures are much reduced.”
Carolan Dobson, chair of the ABB Plan, said: “The trustees are delighted to have completed a buy-in with Aviva, which covers all our members’ benefits, giving them the additional security provided by a well-capitalised and highly regulated insurance company. This is the fruition of several years of careful planning and we are delighted that the buy-in is now completed.”
The trustees were advised by WTW, who led the transaction process, with legal advice provided by Eversheds Sutherland.
