The deal will remove the investment and longevity risk of the members from the scheme
Aviva Life & Pensions UK completes a second annuity buy-in transaction with Aviva Staff Pension Scheme. (Credit: Rept0n1x/Wikimedia Commons)
Aviva Life & Pensions UK has wrapped up a £875m bulk annuity buy-in deal with the Aviva Staff Pension Scheme, thereby covering the insurance of the defined benefit pension liabilities of 2,868 members of the latter.
The transaction will eliminate the investment and longevity risk of the members from the pension scheme sponsored by British insurer Aviva.
According to the insurer, members will not see any change in the amount of benefits they get or the manner in which they are paid as a result of the annuity buy-in transaction.
Aviva bulk purchase annuity origination head Jamie Cole stated: “It has been a year of uncertainty for many, but we’ve consistently helped schemes to secure member benefits throughout and we’re pleased to now support the Aviva Staff Pension scheme with the next stage of their de-risking strategy.
“We remain focused on the disciplined growth of our business and this transaction builds on the record £5bn of new bulk annuity business reported in our third quarter operating update.”
This is the second time that Aviva Life & Pensions UK has secured such a deal with Aviva Staff Pension Scheme. In October 2019, the parties completed a £1.7bn bulk annuity buy-in transaction.
Under the 2019 deal, Aviva Life & Pensions UK insured the defined benefit pension liabilities of nearly 4,300 deferred and 1,500 current pensioner scheme members.
Aviva Staff Pension Scheme trustee chair Brian Bussell said: “The Trustee is delighted to have entered into this second buy-in with Aviva to continue to take steps to help secure the benefits due to our members.
“In addition to the existing longevity swap and buy-in, this recent buy-in helps to further reduce the amount of longevity and investment risk within the Scheme.”
The trustee of the pension scheme was independently advised during the bulk annuity buy-in transaction by Hymans Robertson and Linklaters.
Earlier this month, Aviva completed a £400m annuity buy-in deal with the Marks & Spencer Pension Scheme, which is associated with British retailer Marks & Spencer.