Smiths Group pension scheme secured a £207 million annuity with Canada Life Deal using Aon’s Compass platform in their seventh bulk annuity purchase.
The trustees were advised by Aon Hewitt, using its Compass bulk annuity platform – across the sponsor’s two schemes, Aon Hewitt has now secured seven bulk annuities totalling around £1.5 billion as part of a phased de-risking programme.
The majority of pensioners schemes benefits are now funded by bulk annuities; Nicholas Godden, Chair of the Trustee of the Smiths Industries Pension Scheme, commented that after having made “considerable strides to completely de-risk the scheme” this remains the scheme’s long-term aim.
“This is the first buy-in we have completed with Canada Life as part of our long-term de-risking strategy,” he said.
The latest annuity improved the return on scheme assets while reducing risk – Aon noted this reflects competitive pressures in the annuity market and the current investment opportunities accessible to insurers.
Dominic Grimley, Risk Settlement adviser at Aon Hewitt, said; “The Smiths Industries Pension Scheme trustees and manager reacted quickly to market opportunities, allowing us to conclude broking within a few weeks of initial quotations and then to secure terms as favourable as we have seen for some years.
“Canada Life was able to access attractive assets and reflect them appropriately in their pricing – under time pressure – to deliver the leading bid.”
“The deal further cements our progression into medium-sized deals and overall commitment to the bulk annuity market.”
Richard Priestley, Executive Director, Canada Life said; “Working intensively with Aon Hewitt and the Smiths Industries Pension Scheme, we helped deliver, at speed, a competitive price which allowed the scheme to complete the transaction within weeks from selecting their chosen insurer.
Smiths Group bulk annuity deal with Canada Life reflects the carrier’s annuities market development since 2015.
This transaction comes as part of a wider framework under which the trustee and employer are continuing to work together to support further de-risking, capturing market opportunities and capacity.
