Aviva Life & Pensions UK has announced the completion of a £1.7 billion buy-in with the Aviva Staff Pension Scheme, securing the defined benefit pension liabilities of around 5,800 members.
The deal, which affects 4,300 deferred and 1,500 current pension members, follows a £5 billion longevity swap in 2014
The swap passed longevity risk associated with 19,000 members to Munich Re, SCOR and Swiss Re.
“The Trustee is delighted to have entered into this first buy-in to help secure the benefits due to our members,” said Brian Bussell, Chair of the Trustee of the Scheme.
“Combined with the existing longevity swap, this buy-in means that the Scheme has now hedged a material amount of longevity and investment risk.
Hymans Robertson’s leadership, advice and insights proved invaluable to us in reaching this significant milestone for the Scheme.”
Brian Bussell, Chair of the Trustee of the Aviva Staff Pension Scheme, commented, “The Trustee is delighted to have entered into this first buy-in to help secure the benefits due to our members, working closely with our advisers and Aviva to do so.
“Combined with the existing longevity swap, this buy-in means that the Scheme has now hedged a material amount of longevity and investment risk.”
Jason Windsor, Chief Financial Officer, Aviva, added, “This transaction capitalises on Aviva’s expertise in the pension de-risking market and builds on the strong funding position of the Scheme.
“This is a result of the years of joint stewardship between Aviva and the Trustee in building the financial strength of the Scheme. We look forward to continuing this relationship as the fund enters this new de-risking phase.”
“This latest transaction underlines our skills and expertise in the pension de-risking market, and I am delighted that we have secured this transaction with the Scheme,” noted Tom Ground, Managing Director of Defined Benefit Solutions at Aviva.
“We have significantly strengthened our pension de-risking capability in recent years and by securing this transaction we have once again shown that Aviva can service a wide variety of schemes in the market.”
Michael Abramson, Partner at Hymans Robertson and lead adviser on the transaction added, “Hymans Robertson is delighted to have helped the Trustee take this meaningful step in its de-risking journey. Despite political uncertainty and market volatility, 2019 has already proven a record year for the bulk annuity market, with total transaction volumes in excess of £36bn.”