With the deal completed, Aviva Life & Pensions UK will insure the defined benefit pension liabilities of approximately 4,300 deferred and 1,500 current pensioner scheme members
Aviva Life & Pensions UK has wrapped up a £1.7bn bulk annuity buy-in deal with the Aviva Staff Pension Scheme, which covers nearly 5,800 members.
Following the completion of the deal, Aviva Life & Pensions UK will insure the defined benefit pension liabilities of around 4,300 deferred and 1,500 current pensioner scheme members. Furthermore, it will remove the investment and longevity risk of the members from the scheme.
Aviva Life & Pensions UK says that members will not be impacted by the transaction
According to the Aviva subsidiary, members will not face any change in the amount of benefits they get or how they are paid as a result of the transaction. The company claimed that the financial position of the scheme has made the Trustee to execute its first buy-in as part of a long-term plan to de-risk the scheme.
Aviva Staff Pension Scheme Trustee chair Brian Bussell said: “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.”
Hymans Robertson, Linklaters and Redington independently advised the Scheme Trustee throughout the process.
Aviva chief financial officer Jason Windsor said: “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.”
In July 2019, Aviva UK launched a new workplace pension default investment strategy – ‘Stewardship lifestyle strategy’, which is claimed to incorporate ethical and environmental, social and governance (ESG) considerations.
The strategy covers ethical and ESG considerations right across the growth and consolidation stage. Aviva UK said that irrespective of when a first investment is made by a member, the considerations are integrated right till their selected retirement date.