Mercer owner's UK scheme insures £1.9bn of liabilities
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The trustees of the MMC UK Pension Fund have completed a £1.9bn full buy-in of the Sedgwick Section of the scheme, including the novation of three longevity swaps.
The deal with Standard Life went through in July 2025 and covers all 6,500 members of the Sedgwick Section.
US insurance brokerage Marsh McLennan is the parent company of pensions advisory and master trust Mercer, which acted as the lead broker for the buy-in. The Sedgwick Group was bought by Marsh McLennan in 1998.
The buy-in includes the novation of three existing longevity swaps with Canada Life Re, Munich Re and the Prudential Insurance Company of America from the Guernsey-based captive vehicle Mercer ICC.
The pension trustees and sponsor took advice from separate teams at Mercer on risk transfer, actuarial, investment, insurer financial strength and post-transaction management. Law firm Linklaters advised the trustees, while Marsh McLennan had input from lawyers at Herbert Smith Freehills Kramer. Eversheds Sutherland advised Standard Life.
Trustee chair Bruce Rigby called the transaction the “natural next step” for the Sedgwick Section.
“The trustee and Marsh McLennan commissioned a full review of the bulk annuity market and selected Standard Life as the overall most attractive immediate and long-term partner for the fund’s Sedgwick Section liabilities,” he added.
Phil Parkinson, UK investments and retirement leader at Mercer, said the separate risk transfer teams at Mercer working for the trustee and sponsor “collaborated closely with Standard Life, the reinsurers and the various legal advisers to optimise pricing and terms, maximise efficiency and minimise risk for both the trustee and Marsh McLennan”.
Director of defined benefit solutions at Standard Life, Kieran Mistry, thanked all parties involved for their teamwork and support, noting that “executing this complex transaction required a highly collaborative approach between all parties, leveraging the strong relationships between Mercer, Standard Life and the reinsurers”.
Other bulk annuity deals revealed by Standard Life this year include a £280m buy-in with the Cancer Research UK Pension Scheme and a £250m buy-in with the scheme of construction machinery firm Caterpillar.
What are the things to keep in mind when converting a longevity swap to a buy-in or buyout?
