Aviva completes £350m bulk annuity deal

Insurer Aviva has completed a £350 million bulk purchase annuity buy-in transaction with the Trustee of the Co-operative Pension Scheme (Pace).

The deal was completed using a pre-agreed ‘umbrella contract’ to support a quick and efficient process. It is the second deal of this type between Aviva and the Co-operative Pension Scheme, following a £1 billion transaction announced in January this year.

Aviva will insure the defined benefit pension liabilities of an additional 2,300 members, removing the investment and longevity risk of these members from the Scheme.

The process to select an insurer and negotiate terms was led by Aon on behalf of the Trustee.

Tom Ground, managing director of annuities and equity release at Aviva, said: “We are delighted to have completed a second transaction this year with the Co-operative Pension Scheme. All parties have been closely monitoring pricing, given that current market conditions presented potential opportunities for the scheme. The transaction was completed in under two weeks from start to finish, with the existing ‘umbrella contract’ allowing the parties to transact smoothly and quickly.”

“As the UK’s largest multi-line insurer, Aviva has the expertise and capability to support a wide variety of schemes on their de-risking journey,” he added.

Chris Martin of Independent Trustee Services, the chair of the Co-operative Pension Scheme’s Trustee, said: “The Trustee Board is delighted to have been able to take this further step in enhancing the security of our members’ benefits. The ability to transact this quickly and efficiently is testament to all of the hard work from our colleagues in the Co-op Pensions Department in getting Pace to a position where such security enhancing options are possible. Thanks also go to all of our advisers for their work in exceptionally challenging circumstances in making this outcome possible.”