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The Rolls-Royce & Bentley Pension Fund has completed a £880m buy-in, insuring the benefits of about 6,000 scheme members.
The scheme sponsored by luxury carmaker Bentley Motors chose Standard Life, part of Phoenix Group, for the full buy-in, concluding the transaction this month.
The deal included novation of an existing longevity swap the scheme had with Standard Life, executed in 2013 with Abbey Life. The insurer was bought by Phoenix in 2016.
Kate Leigh, a trustee director at Vidett and trustee of the scheme, called the transaction "a significant step” in the fund’s derisking strategy.
“Standard Life’s expertise was instrumental in navigating this stage of our journey and achieving our objectives. We look forward to continuing our work together to safeguard our members’ futures,” she added.
The trustees were advised on the transaction by Isio, while Redington gave investment and Sackers legal advice. Consultancy PwC and law firm Travers Smith advised the sponsoring company. Standard Life took legal advice from Eversheds Sutherland.
Nick Johnson, insurance partner at Isio, said: “We’re proud to have delivered on this complex and innovative transaction to lock down significant risks for the scheme, its members and the sponsor.”
Standard Life said it worked with the trustee and Bentley Motors "over an extended period” to achieve the buy-in.
"This transaction is another demonstration of our capabilities in novating longevity swaps, as well as our commitment to working with existing clients to support them in progressing their de-risking objectives,” said Kieran Mistry, director of defined benefit solutions at the insurer.
Mistry noted that the risk transfer market is showing no signs of slowing down, with 2024 volumes expected to exceed £50bn.
Alternative derisking options to insurance, such as DB superfunds, have struggled to come off the ground. Just one stage-to-buyout provider has had regulatory approval so far and has concluded two deals in the years since its inception. Rival consolidator the Pension SuperFund, which proposed an unsegregated run-off model, exited the market last year after failing to achieve a positive assessment by the Pensions Regulator. The future of the proposed Pension Protection Fund consolidator, on which a consultation closed in April, is currently unclear given a general election due next week with a possible change of government.
What do you think – will a new government see options for DB as a priority?
