Rothesay secures £1.2bn buy-in with retail bank’s pension scheme
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UK specialist pensions insurer Rothesay has completed a £1.2bn full scheme buy-in with the Bank Section of the Co-operative Pension Scheme.
The Section is sponsored by the Co-operative Bank, the Manchester-headquartered retail and SME bank.
The transaction secures the benefits for all uninsured members of the section - defined benefit liabilities for 2,474 pensioners and dependants and a further 6,531 deferred members.
Nick Slape, chief executive of the Co-operative Bank, said the transition delivers a positive outcome for members whilst also supporting the company’s corporate objectives.
Rothesay said the insurer and the trustee had been working together on this transition since early 2022 as part of a long-term plan to derisk the scheme.
The agreement features residual risks, and the premium was locked to the section’s asset portfolio and paid by in specie transfer.
Tom Pearce, chief executive of Rothesay, said: “After working with the trustee and their advisers for some time, we have been impressed by their focus on the end goal and determination to provide pension security for all their members.”
This is the eighth transaction of 2022 for Rothesay, said the insurer, adding that it is also exclusive on a further £5bn of new business that is expected to complete by the end of this year and into the next.
Pearce said: “Demand for derisking is the strongest we have ever seen, and there are exciting new business opportunities stretching out into 2023. Our significant capital surplus means we are very well placed to execute against this demand, so the outlook has never been more positive.”
Chris Martin, chair of trustees, said: “We are delighted to have taken this significant step in our derisking plans, further improving member security. Our advisers’ commitment to our cause and Rothesay’s flexibility and market insight meant we were able to navigate the recent volatility and design an innovative solution.”
Chris Martin, chair of trustees, said: “We are delighted to have taken this significant step in our derisking plans, further improving member security. Our advisers’ commitment to our cause and Rothesay’s flexibility and market insight meant we were able to navigate the recent volatility and design an innovative solution.”
The lead broker on the transaction was Aon, acting for the trustee. Linklaters provided legal advice to the trustee while Gowlings WLG provided legal advice to Rothesay. XPS Pensions Group and Clifford Chance advised the Bank.
The deal follows the scheme’s £400m buy-in with bulk purchase annuity insurer Pension Insurance Corporation in April 2020.
Will there be more large transactions in 2023?
