The buy-in includes the transfer of a 2018 longevity swap contract, and insures the pension benefits of nearly 6,000 people.
The deal, completed in October, insures 5,800 pensioner members of the scheme and includes the transfer of a longevity swap that was arranged in 2018.
National Grid struck a deal six years ago with Zurich Assurance to insure the pension scheme against the risk of its members living longer than expected. The longevity swap was worth approximately £2bn at the time, and was reinsured by Canada Life Re.
This contract has now transferred to Aviva as part of the buy-in transaction.
Tom Scott, partner at Aon, which advised on the deal, said: “Entering into a longevity swap in 2018 allowed the group to hedge longevity risk until it was in a position to move to buy-in.
“Having flexibility, via a future-proofed longevity swap contract with Zurich to transition to another insurer, enabled us to achieve an excellent outcome for the group and its members.”
Sean Rooney, senior deal manager at Aviva, said: “Our team worked closely with the trustees and their advisers to support them with this important step to provide long-term security for their pensioner members.
“The transaction included the transition of the group’s longevity swap, and throughout the process all parties have been flexible and focused on delivering a successful outcome.”
He also highlighted that the buy-in covered a pension scheme signatory of the Sustainability Principles Charter, launched specifically for the pension insurance sector earlier this year by industry body Accounting for Sustainability.
Stephen Yandle, chair of the pension scheme’s trustee board, said: “The transaction is great news for members… adding further protection to their benefits, and on terms that are fully aligned with our strategic objectives. It was a pleasure working in partnership with Aon and [legal adviser] DLA Piper as part of this transaction, and we look forward to working closely with Aviva in the future.”
