The AQA Pension Scheme has completed a full buy-in covering the benefits of 471 pensioners and dependants and 398 deferred members.  

The awarding body chose Rothesay for the transaction that took place in January this year.   

“The quick execution of this transaction is testament to the excellent preparation undertaken by the trustees and the expertise of our advisers, alongside the execution certainty delivered by Rothesay’s proven offering,” said Bruce Guthrie, who chairs a trustee board that includes professional trustee Kim Nash from Zedra Governance.  

The deal represents a positive outcome for members and the AQA, added chief finance and corporate services officer at AQA, Nick Stevens.  

"Given the buoyancy of the pensions insurance market, we knew it was important to plan and invest in our scheme to ensure it was well prepared,” he remarked.   

The trustees told members that while the buy-in was trustee-led, the AQA was supportive of it and wants the scheme to move to buyout, estimating that this will take up to two years.   

As at 30 September 2023, there was still a £2.8m funding shortfall in the scheme. The trustees agreed that this would be eliminated through investment returns, but the AQA also paid £2m a year into a separate account after the 2018 valuation, reducing to £1.3m from 2023 and ceasing from March that year, as the scheme’s assets and charged account together were around 102% of the cost of securing the benefits with an insurer.  

Before choosing Rothesay, the trustees and AQA formed a working group and approached several insurers. “The trustees’ decision to proceed with Rothesay was made after careful deliberation, taking into account  price, financial strength, reputation, quality  of service and the terms of the policy,” the trustees said.  

Katie Overton, business development at Rothesay, said: "In a busy and competitive pension risk transfer market, the scheme was well prepared, which enabled us to transact efficiently, providing long-term security for its members." 

WTW was the lead adviser, scheme actuary and investment consultant. Shelly Beard, managing director at WTW, called the transaction “a great example of how a well prepared scheme can achieve a positive outcome for members in a highly competitive market”.  

Despite the improved funding levels of many pension schemes and a strong pipeline of transactions in the market, she said her firm continues to see good pricing and capacity for small and mid-sized pension schemes approaching buy-in.  

Mayer Brown gave legal advice to the trustees, while Gowling were the lawyers for Rothesay.  

The AQA previously participated in the Greater Manchester Pension Fund but exited this fund on 28 February 2023, paying a £33.6m settlement. In leaving GMPF, the AQA considered the impact on staff, the benefits of staff being moved to the main scheme to ensure the fairness of pension offering across the charity, the benefits of exiting the scheme when the net liabilities of the scheme were low, and the long-term affordability of continuing to participate in the GMPF. 

The AQA also participates in Teachers' Pensions and the Universities Superannuation Scheme.