Global insurance and reinsurance broker Aon has been named as the adviser for the Trustees of the Bank of America Merrill Lynch UK Pension Plan’s recent £400 million (US$523mn) buy-in transaction with Scottish Widows.
The buy-in covers all 915 pensioner members in the bank’s largest pension scheme, and is the latest step in its efforts to de-risk the plan, ultimately enhancing the security of pensioner members’ benefits, while at the same time improving the long-term funding of the plan.
Bank of America Merrill Lynch had previously participated in two buy-ins for its smaller pension schemes.
Peter Gibbs, Chairman of the Trustees of the Bank of America Merrill Lynch UK Pension Plan, commented: “This transaction allowed us to continue our programme of de-risking by securing a bulk annuity for pensioner members on favourable terms, which has led to an improvement in the funding position on the Plan’s long-term funding basis.
“We are delighted with the advice and support provided by Aon and Linklaters throughout the transaction process, and to extend the bank’s existing relationship with Scottish Widows by entering this long-term partnership achieving greater security for members in the Plan.”
Aon advised the plan throughout the entire buy-in transaction, leveraging its Bulk Annuity Compass platform, which, has facilitated the successful completion of more than £10 billion (US$13.1bn) of bulk annuity since 2016.
Head of Bulk Annuities at Aon, John Baines, added: “It was a pleasure to support the Trustees and Bank of America Merrill Lynch in completing the buy-in. As a financially sophisticated Trustee Board, understanding the additional security that could be provided to members through an insurance solution was a particularly important aspect of this transaction. Their understanding of market dynamics allowed the Trustees to navigate a busy market and quickly lock into great pricing.”
Matt Wilmington, Head of Origination and Structuring at Scottish Widows, said: “We are proud that the Trustees have chosen to insure members’ benefits with us as part of their ongoing de-risking plan. Working collaboratively with Aon, Linklaters and the Trustees, we were able to deliver an attractive price and complete the transaction within weeks of being selected as the Trustees’ preferred provider.”
