The Retreat York Pension Scheme has completed a £30m full buy-in with Royal London, the insurer who entered the bulk annuity market several months ago with the buy-ins of two of its own schemes. A further £100m buy-in was transacted with an unnamed scheme last month.  

In July this year, Royal London transacted with its first external pension scheme, a £30m full scheme buy-in with the Retreat York Pension Scheme, for employees of the non-profit mental health clinic. The insurer said this was followed by a further £100m transaction with an unnamed external pension scheme in September.    

The deal with York Retreat covers the benefits of 202 pensioners and 108 deferred members. Vidett Trustees, represented by Duncan Willsher, is the sole independent trustee to the scheme.  

Risk transfer has become popular because funding levels have increased, but “it doesn’t mean it’s easy for schemes, particularly small ones”, said Willsher.  

“The process can be complex if you aren’t working with the right people. Working closely with the sponsor, our advisers and Royal London, we were able to be decisive when inevitable challenges arose and ready to act swiftly,” he said.  

The buy-in was advised by specialist consultancy K3 Advisory. The trustees were also advised by First Actuarial and Wrigleys Solicitors, while the Retreat York was advised by Spence & Partners.  

K3 managing director Adam Davis said: “We are exceptionally proud to have worked with Royal London to transact their first external deal in the bulk annuity market.”  

He added that affordability had been an issue for the scheme, saying: "Working with Royal London we were able to confidently secure attractive pricing after a short period of monitoring to enable a transaction at a level affordable to the scheme.”  

Baljit Khatra, bulk purchase annuity origination lead at Royal London, said: “As the only mutual operating in the bulk annuity market, we offer trustees a genuine alternative, and we’re delighted to welcome the members of the Retreat York Pension Scheme to Royal London as we support them in the future.”  

The insurer’s director of BPA solutions, Paul Bowker, said the firm has invested “significantly” to build its bulk annuity offering.  

He added: "We will be building on our strong customer service credentials and delivering our BPA administration in-house to ensure we deliver the highest standards of service."  

Royal London's BPA team of 40 will focus on deals of up to £500m. In November last year, the insurer transacted a £250m full scheme buy-in with the Royal Liver UK Pension Scheme, followed in January by a £350m buy-in to insure a subset of members in the Royal London Group Pension Scheme.

Will the entrance of Royal London make it easier for small schemes to secure a deal?