Canada Life has secured their tenth bulk annuity purchase, a £146 million bulk annuity with the Smiths Group pension scheme.
The £3 billion Smiths Industries Pension Scheme has secured the bulk annuity with Canada Life after the auction process was redesigned to accommodate the post-COVID-19 market conditions.
The transaction was described as having taken advantage of strong pricing in a turbulent year for markets, with the annuity further improving the security of members’ benefits.
The trustees and sponsor were advised by Aon, using its Compass bulk annuity platform. Redington advised on the investment aspects of the transaction.
This transaction for the Smiths Industries Pension Scheme follows the recent announcement of a £142 million buy-in for Smiths Group’s other major UK scheme, the TI Group Pension Scheme.
Across the Smiths Group’s two UK schemes, approximately 71% of pensioner liabilities are now de-risked through 10 bulk annuities advised on by Aon.
Nicholas Godden, Chair of the Trustee of the Smiths Industries Pension Scheme, commented: “This is another well-timed step in our de-risking strategy, adding further to member protection despite a challenging market environment. Thanks to our advisers and to the Group’s continued support, the scheme is well positioned for the steps to come.”
Nick Flynn, Annuity Sales Director at Canada Life said: “In these times of global uncertainty it is very positive for the scheme members that we can provide certainty as we further develop our relationship with the Smiths Industries Pension Scheme through this buy-in.”
Dominic Grimley, Risk Settlement adviser at Aon, added: “Through extra planning, this transaction was designed to fit the circumstances we face in lockdown. This meant the focus was firmly on straightforward execution and price capture, while opportune timing also enabled a gain to be made against the scheme’s funding target.”