Bulk annuities update: Arqiva completes £204m buy-in with PIC

The transaction is worth £204m, according to PIC, and insures more than 800 members in total.

Paul Robinson, origination transaction manager at PIC, said: “The trustees and the company were well prepared, which paved the way for a smooth transaction, providing security to all their members in the long term. The rate at which well-organised schemes are entering the pension risk transfer market in 2024 continues apace.”

Tom O’Connor, chair of the scheme’s trustee board, said: “Our members have been at the forefront of our mind throughout this process, so communication has been a key consideration.”

He also praised the work of Independent Governance Group, who provided professional trustee services to the scheme, and advisers Isio, Baker McKenzie and Mercer.

Nortel completes buyout with L&G

Also this week, another telecoms-related scheme – the Nortel Networks UK Pension Plan – finalised an insurance buyout with Legal & General (L&G), securing £2.5bn of liabilities.

This was the third insurance transaction between the Nortel scheme and L&G since 2018 when the trustees moved to secure benefits in excess of Pension Protection Fund (PPF) levels for members.

Nortel Networks UK went into administration in 2009 and the scheme was placed into the PPF’s assessment process. During this period the scheme secured “material additional funds” from the sponsor’s insolvency process, according to a press release from L&G, helping it to secure an initial £2.4bn buyout covering the majority of scheme members.

Another transaction followed in 2021 worth approximately £105m, before the final benefits were secured earlier this year.

Dominic Moret, head of origination and execution for UK pension risk transfer at Legal & General Retirement Institutional, said: “This transaction marks a significant milestone in the plan’s journey since 2009 and is testament to the work carried out by the trustee board and their advisors to secure funds from the insolvency process.

“The collaboration, flexibility and foresight shown by all parties enabled the plan to complete a ground-breaking initial transaction in 2018 with the ability to secure additional benefits through follow up transactions.”

Telereal dials down pension risk with £130m buy-in

Aviva has completed a £130m full scheme buy-in with the Telereal Pension Plan, insuring the benefits of around 500 members.

Carl Clissold, chair of the trustee board, said the scheme was now being prepared for buyout.

Joe Hathaway, associate partner at Aon, one of the advisers on the deal, said: “Achieving attractive terms for the trustees was contingent on a quick execution and relied on all parties working extremely hard over just a few weeks.”

Separately, Aon has highlighted significant appetite and capacity for bulk annuity deals involving schemes with less than £150m of liabilities.

The consultancy group has its own process for small scheme de-risking, known as Pathway. Several other advisory groups and insurers have set up similar propositions to make it easier for small schemes to navigate the insurance market.

Hathaway said: “This expansion in capacity across the industry is welcome as it is really needed to support the increasing level of demand across the full range of scheme sizes.

“Most significantly, the market is especially active for schemes that have prepared correctly and have been taken to market in the right way.”