London headquartered insurer Aviva has completed a £190 million bulk purchase annuity buy-in transaction with the Trustees of the Wyeth Group Pension and Life Assurance Scheme.
The sponsoring employer, John Wyeth & Brother Limited, is part of the Pfizer Group, one of the world’s largest biopharmaceutical companies.
Aviva will insure the defined benefit (DB) pension liabilities for approximately 2000 members, removing the investment and longevity risk of these members from the Scheme.
The transaction also makes use of Aviva’s Defined Benefit and Contribution Plan, which will ultimately secure benefits for those members with both defined benefit and defined contribution (DC) arrangements following a period after the initial buy-in transaction.
The process to select an insurer and negotiate terms was led by Mercer on behalf of the Trustees, with Allen & Overy LLP providing legal advice.
Jamie Cole, Head of Bulk Purchase Annuity Origination at Aviva, said, “We’ve worked closely with the Trustees and their advisers and are delighted to have helped secure benefits for these members.
“Our Defined Benefit and Contribution Plan allows both DB and DC arrangements to continue to be held under a single arrangement with Aviva, providing the members with greater flexibility at retirement.”
Debbie Berney, Chair of Trustees Wyeth Group Pension and Life Assurance Scheme, added, “We welcome this transaction as our second phase in ensuring the Scheme is able to meet the full costs of its future pension payments to all members.
“This has only been achieved by considerable dedication from the Trustees working in partnership with their advisors Mercer, Allen & Overy and FTI Consulting, to achieve this attractive transaction with Aviva, as part of the de-risking plan for the Scheme.”
Patrick McKenna, Senior Director International Pensions at Pfizer, said, “This is another important step for the Scheme and wider Group as we seek to secure members’ benefits and reduce the risk exposures of our pension arrangements.
“Aviva put forward attractive pricing and innovative proposals to address a complex set of benefits, and we are pleased to partner with them on this transaction.”
Deborah McWhinney, Risk Transfer Principal at Mercer, said, “We are delighted to have been able to work with the Trustees to bring the Scheme to the market and achieve such a successful transaction.
“This is an important milestone for the Trustees in their de-risking journey and represents an impressive outcome for the long term security of members’ benefits.”