Four bulk annuity deals worth a combined £1bn have been announced this week, further demonstrating the significant amount of activity in the insurance market.
Diamond company De Beers has secured a full buy-in for its defined benefit pension scheme worth £870m.
Pension Insurance Corporation has agreed to take on payment of benefits for 473 deferred and 1,464 pensioner members of the scheme.
Mike Page, chair of trustees for the De Beers scheme, said the buy-in was the result of “many years of hard work” implementing and maintaining a long-term de-risking strategy.
Dr Richard Wellard, partner at Hymans Robertson, which advised on the deal, said: “We are pleased to have been able to help the trustees secure their members’ benefits and achieve their goal.
“It reflects the vibrant bulk annuity market, but also the preparedness of the scheme, which is a vital factor in ensuring that insurers focus on a particular transaction over the many other opportunities brought to them.”
Insurance consolidator announces full scheme buy-in
Elsewhere, RiverStone Management has secured a full buy-in with Standard Life, worth £95m and covering 388 members.
The transaction relates to a pension scheme sponsored by Brit Insurance and is the second Brit-sponsored scheme to achieve a full scheme buy-in.
As well as insuring full benefits, the deal also includes an enhancement to members’ benefits to give full future inflation protection.
Nick Bentley, chair of the trustees of the RiverStone Management Pension and Life Assurance Plan, said: “Based on the pricing achieved and the full support of the sponsor we were delighted to be able to secure our members with Standard Life, and in addition provide enhanced benefits so that our members with inflation linked benefits are fully protected against the potential of high inflation in the future.”
David Stewart, partner at LCP, added that significant preparation by the trustees had ensured good quality data and certainty around benefits.
“This preparation put them in the prime position in a busy market driving a competitive process,” Stewart said.
“The attractive pricing meant the trustees could afford to enhance member benefits providing full inflation-proofing. Recent high inflation levels have shown how pensions can be quickly eroded in real terms so this enhancement provides a real long-term benefit for the members.”
Energizer powers de-risking with £44m deal
Battery maker Energizer has completed a full scheme buy-in with Just Group worth £44m, the insurer announced this week.
The transaction secures benefits for 409 pensioners and 358 deferred members of the Energizer UK Pension Plan.
Just Group processed the deal using a proprietary quotation service to speed up transactions by monitoring pricing against scheme data.
Motor company in £19m buy-in
Another full scheme buy-in was announced this week by consultancy group K3 Advisory.
In a press release, K3 said it had advised on a £19m buy-in for an unnamed motor industry company with a similarly unidentified insurer. The transaction secured benefits for 52 pensioners and 17 deferred members.
Alan Greenlees, client director at Zedra, praised the “innovation and pragmatism displayed by all the advisers” during the insurance process.
