Travel industry caterer insures three-section scheme for £100m
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A catering and onboard retail provider in the travel industry has completed a £100m buy-in covering 2,100 defined benefit members.
The full buy-in with Standard Life, part of Phoenix Group, is for members of two linked pension schemes sponsored by “an industry-leading provider of catering, onboard retail, and food service logistics to the travel industry”, the insurer has said.
It was completed in April and involved combining three pension scheme sections into a single transaction.
WTW acted as lead advisers to the trustees. Baker McKenzie gave legal advice, while Gallagher provided scheme actuary advice and administration support.
Mark Johnston, a client director at trustee firm Vidett who chairs the trustee board of the scheme, said: “Following our appointment in August 2023 and then working with the trustee board, we recognised that a buy-in would allow us to reduce the risks involved in running the schemes and ensure long-term security for all members of the schemes.”
He said the request to insurers led to "a highly competitive quotation process with five insurers”.
Aligning the three pension sections into one package made them more attractive to insurers than each would have been individually, said Jenny Neale, Director at WTW.
“The highly competitive process allowed the trustee and company to test the different aspects of the insurers’ propositions and produced a great result for the schemes and their members,” she added.
Neale said that despite record volumes of transactions in 2023, bulk annuity pricing has remained attractive over recent months, and expects activity to increase over the rest of this year.
The full buy-in with Standard Life, part of Phoenix Group, is for members of two linked pension schemes sponsored by “an industry-leading provider of catering, onboard retail, and food service logistics to the travel industry”, the insurer has said.
It was completed in April and involved combining three pension scheme sections into a single transaction.
WTW acted as lead advisers to the trustees. Baker McKenzie gave legal advice, while Gallagher provided scheme actuary advice and administration support.
Mark Johnston, a client director at trustee firm Vidett who chairs the trustee board of the scheme, said: “Following our appointment in August 2023 and then working with the trustee board, we recognised that a buy-in would allow us to reduce the risks involved in running the schemes and ensure long-term security for all members of the schemes.”
He said the request to insurers led to "a highly competitive quotation process with five insurers”.
Aligning the three pension sections into one package made them more attractive to insurers than each would have been individually, said Jenny Neale, Director at WTW.
“The highly competitive process allowed the trustee and company to test the different aspects of the insurers’ propositions and produced a great result for the schemes and their members,” she added.
Neale said that despite record volumes of transactions in 2023, bulk annuity pricing has remained attractive over recent months, and expects activity to increase over the rest of this year.
Emma Haylock, BPA transaction manager at Standard Life, said a collaborative approach made for “a smooth and efficient derisking process, with all parties completing significant preparation work”, which allowed the transaction to be completed within a relatively short timeframe.
As schemes rush to lock in funding levels and pricing, is DB run-on likely to take off?
As schemes rush to lock in funding levels and pricing, is DB run-on likely to take off?
