Electricity supply scheme in £1.7bn buy-in
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The National Grid Electricity Group of the Electricity Supply Pension Scheme completed a £1.7bn buy-in last month, insuring the benefits of 5,800 pensioners.
The transaction with Aviva included transitioning an existing longevity swap with Zurich Assurance to Aviva.
Aon was the sole transaction adviser. The trustees took advice from Mayer Brown International, and DLA Piper also gave legal advice on the deal.
Trustee chair Stephen Yandle said the trustees were pleased to have been able to take the next step on the scheme’s derisking journey.
“The transaction is great news for members in the group, adding further protection to their benefits, and on terms that are fully aligned with our strategic objectives,” he added.
Aon partner Tom Scott 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 all parties had been flexible and focussed on delivering a successful outcome.
“We’re especially proud that we can secure benefits for yet another signatory scheme of AFS’s Sustainability Principles Charter, reinforcing our commitment to this important initiative,” Rooney remarked.
One of Aviva’s recent deals, a £1.3bn buy-in with the RAC (2003) Pension Scheme, included the novation of an existing longevity swap and a transfer of illiquid assets, according to the insurer. In October, the insurance company also revealed a £1.5bn full buy-in with the Michelin Pension and Life Assurance Plan, similarly with an in-specie transfer of assets.
As the year draws to a close, insurers are sharing updates about larger deals. The largest to date have been two buy-ins, totalling about £11bn, with the NatWest Group Pension Fund, reportedly won by Rothesay Life.
The transaction with Aviva included transitioning an existing longevity swap with Zurich Assurance to Aviva.
Aon was the sole transaction adviser. The trustees took advice from Mayer Brown International, and DLA Piper also gave legal advice on the deal.
Trustee chair Stephen Yandle said the trustees were pleased to have been able to take the next step on the scheme’s derisking journey.
“The transaction is great news for members in the group, adding further protection to their benefits, and on terms that are fully aligned with our strategic objectives,” he added.
Aon partner Tom Scott 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 all parties had been flexible and focussed on delivering a successful outcome.
“We’re especially proud that we can secure benefits for yet another signatory scheme of AFS’s Sustainability Principles Charter, reinforcing our commitment to this important initiative,” Rooney remarked.
One of Aviva’s recent deals, a £1.3bn buy-in with the RAC (2003) Pension Scheme, included the novation of an existing longevity swap and a transfer of illiquid assets, according to the insurer. In October, the insurance company also revealed a £1.5bn full buy-in with the Michelin Pension and Life Assurance Plan, similarly with an in-specie transfer of assets.
As the year draws to a close, insurers are sharing updates about larger deals. The largest to date have been two buy-ins, totalling about £11bn, with the NatWest Group Pension Fund, reportedly won by Rothesay Life.
