Aviva announces £350m bulk annuity transaction with the trustee of the Co-operative Pension Scheme

Aviva today announces it has completed a £350million bulk purchase annuity buy-in transaction with the Trustee of the Co-operative Pension Scheme (Pace).

This is the second deal of this type between Aviva and the Co-operative Pension Scheme, following a £1billion transaction announced in January this year*, and it was completed using a pre-agreed ‘umbrella contract’ to support a quick and efficient process.

Aviva will insure the defined benefit pension liabilities of an additional 2,300 members, removing the investment and longevity risk of these members from the Scheme. Members will see no change in the amount of their benefits or the way in which they are paid as a result of the transaction, which forms part of the Trustee’s de-risking strategy.

The process to select an insurer and negotiate terms was led by Aon on behalf of the Trustee. The Trustee received legal advice from Linklaters and investment advice from Mercer. 

Tom Ground, Managing Director of Annuities and Equity Release at Aviva, said:

We are delighted to have completed a second transaction this year with the Co-operative Pension Scheme.  All parties have been closely monitoring pricing, given that current market conditions presented potential opportunities for the scheme.  The transaction was completed in under two weeks from start to finish, with the existing ‘umbrella contract’ allowing the parties to transact smoothly and quickly.”

“As the UK’s largest multi-line insurer, Aviva has the expertise and capability to support a wide variety of schemes on their de-risking journey”.

Chris Martin of Independent Trustee Services Limited, the chair of the Co-operative Pension Scheme’s Trustee, said:

“The Trustee Board is delighted to have been able to take this further step in enhancing the security of our members’ benefits. 

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“The ability to transact this quickly and efficiently is testament to all of the hard work from our colleagues in the Co-op Pensions Department in getting Pace to a position where such security enhancing options are possible. Thanks also go to all of our advisers for their work in exceptionally challenging circumstances in making this outcome possible”.

Gary Dewin, Director of Reward for the Co-op, said:

“We’re pleased to have been able to take this opportunity, built on the ability and experience of our Pensions Team and Trustee Board together with the relationship we’ve established with Aviva, to further improve the strength of the scheme for its members.”

Tom Scott, Principal Consultant in Aon’s Risk Settlement Group, said:

“By leveraging the previous buy-in transaction with Aviva, we were able to capture a short-term pricing opportunity on behalf of the Trustee. Swift execution was required in the circumstances, which was made possible by the Scheme being well-prepared and having efficient and nimble governance processes in place.”



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