Rothesay, the UK’s largest specialist pensions insurer, has completed a £1.2 billion full scheme buy-in with The Bank Section of the Co-operative Pension Scheme.
The Section is sponsored by The Co-operative Bank the Manchester-headquartered retail and SME bank.
The transaction secures the benefits for all uninsured members of the Bank Section – defined benefit liabilities for 2474 pensioners and dependants, as well as a further 6531 deferred members, following a £400 million buy-in in 2020.
Additionally, this buy-in is part of a long-term plan to de-risk the Scheme, and the Trustee and Rothesay have both been working together on this transaction since early 2022.
The agreement features residual risks, and the premium was locked to the Section’s asset portfolio and paid by in specie transfer.
This marks the eighth transaction of 2022 for Rothesay, with the insurer also exclusive and in execution on more than £5 billion of new business with other pension schemes over the remainder of
the year and into 2023.
Moreover, the lead broker on the transaction was Aon, acting for the Trustee. At the same time, legal advice was provided to the Trustee by Linklaters and to Rothesay by Gowlings WLG. The Bank was advised by XPS Pensions Group and Clifford Chance.
Tom Pearce, CEO of Rothesay, said: “We are very pleased to support The Co-operative Bank with this important step in its journey toward buy-out. After working with the trustee and their advisers for some time, we have been impressed by their focus on the end goal and determination to provide pension security for all their members.
“Demand for de-risking is the strongest we have ever seen and there are exciting new business opportunities stretching out into 2023. Our significant capital surplus means we are very well-placed to execute against this demand, so the outlook has never been more positive.”
Chris Martin, Chair of Trustees, commented: “We are delighted to have taken this significant step in our de-risking plans, further improving member security. Our advisers’ commitment to our cause and Rothesay’s flexibility and market insight meant we were able to navigate the recent volatility and design an innovative solution.”
Nick Slape, CEO of The Co-operative Bank, said: “The Bank is supportive of the strong stewardship and de-risking actions taken by the Trustee. This delivers a positive outcome for members of the Bank Section, through offering enhanced protection of benefits, whilst also supporting our corporate objectives. I am delighted that we have been able to work co-operatively with the Trustee and Rothesay to reach this point.”
Martin Bird, Senior Partner at Aon, added: “In what has proven to be one of the most volatile and busy years on record, we are extremely pleased to have supported the Trustee in achieving this significant milestone, helping to provide further security for members of the Section.”
Phil Goss from Linklaters, said: “Having worked with the Scheme for a number of years, it’s been very rewarding to support the Trustee as they prepared for and completed this major step. This transaction shows once again that, with a collaborative approach from all stakeholders, solutions can always be found for even quite complex and non-standard risks.”
