National Grid continues to derisk with £900m buy-in
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The National Grid UK Pension Scheme trustees sealed a £900m buy-in for Section A pensioners and dependants last month, having concluded several large risk transfers since 2019.
The transaction with Rothesay follows two previous buy-ins with the same insurer, a £800m deal in 2020 and a £2.8bn transaction in 2019. In 2019, the scheme also conducted a £1.6bn buy-in with Legal & General, covering 6,000 pensioners of Section B.
The transaction with Rothesay follows two previous buy-ins with the same insurer, a £800m deal in 2020 and a £2.8bn transaction in 2019. In 2019, the scheme also conducted a £1.6bn buy-in with Legal & General, covering 6,000 pensioners of Section B.
The third transaction with Rothesay insures 7,130 older and recent pensioners of the scheme. Rothesay said its in-house asset management team therefore sourced both longer and shorter dated assets to support the liabilities.
Chris Martin from Independent Governance Group, who chairs NGUKPS's board of 12 trustees, said: “Having taken on the position of chair of the scheme after the first two buy-ins, the board and National Grid completed a review of our shared strategic direction and concluded that it was appropriate to continue to derisk the scheme and further enhance the security of our members.”
Aon was the lead risk transfer adviser. Partner Mike Edwards said Rothesay provided the level of flexibility needed to meet the scheme’s requirements.
“It is a competitive derisking market for both schemes and insurers right now and to achieve such a positive outcome via an innovative transaction required a high degree of collaboration between all parties – Rothesay, the scheme and advisers,” Edwards said.
Roisin O’Shea, business development at Rothesay, said the firm was delighted to partner with the scheme again, adding: “We worked with the trustee of the scheme to create a bespoke solution that met their objectives.”
So far this year, Rothesay has announced bulk annuity deals with Skipton Building Society, AQA Education and ABC Cinemas.
The National Grid trustees had legal advice from Sackers and actuarial and investment advice from LCP, which also provided executive and governance support. Rothesay took legal advice from CMS.
The NGUKPS has about 26,000 active, deferred and pensioner and dependant members. It closed to new joiners in April 2002.
Aon was the lead risk transfer adviser. Partner Mike Edwards said Rothesay provided the level of flexibility needed to meet the scheme’s requirements.
“It is a competitive derisking market for both schemes and insurers right now and to achieve such a positive outcome via an innovative transaction required a high degree of collaboration between all parties – Rothesay, the scheme and advisers,” Edwards said.
Roisin O’Shea, business development at Rothesay, said the firm was delighted to partner with the scheme again, adding: “We worked with the trustee of the scheme to create a bespoke solution that met their objectives.”
So far this year, Rothesay has announced bulk annuity deals with Skipton Building Society, AQA Education and ABC Cinemas.
The National Grid trustees had legal advice from Sackers and actuarial and investment advice from LCP, which also provided executive and governance support. Rothesay took legal advice from CMS.
The NGUKPS has about 26,000 active, deferred and pensioner and dependant members. It closed to new joiners in April 2002.
NGUKPS was split into three sections, A, B and C, in 2017, when National Grid sold its gas distribution business to Cadent Gas. On selling the remaining stake two years later, Cadent agreed to set up its own DB pension scheme, which took on the assets and liabilities of section C in autumn 2020. Section B members are understood to have transferred to the National Gas Transmission Pension Scheme following the sale of the gas transmission business to an investor consortium.
Separately, the National Grid Electricity Group of the Electricity Supply Pension Scheme concluded a £1.7bn pensioner buy-in with Aviva last year.
Separately, the National Grid Electricity Group of the Electricity Supply Pension Scheme concluded a £1.7bn pensioner buy-in with Aviva last year.
