This is the second buy-in transaction between Aviva and the Marks and Spencer Pension Scheme, following a £925 million transaction announced in May 2018*, and it was completed using a pre-agreed ‘umbrella contract’ to support a quick and efficient process. It builds on the important wider existing corporate relationship that Aviva already has with Marks and Spencer, for which it provides health and general insurance.
Aviva will insure the defined benefit pension liabilities of a further 2,293 pensioner members, removing the investment and longevity risk of these members from the Scheme. Members will see no change in the amount of their benefits or the way in which they are paid as a result of the transaction.
The process to select an insurer and negotiate terms was led by Lane Clark and Peacock (LCP).
Jamie Cole, Head of Bulk Purchase Annuity Origination at Aviva, said: “We are delighted to have completed a second transaction with the Marks and Spencer Pension Scheme, building on the great working relationship we already share. The transaction was completed using a pre-agreed ‘umbrella contract’, allowing the efficient completion of the transaction. It provides greater security for Scheme members and again demonstrates the expertise and capability of the Aviva team.”
Graham Oakley, Chairman of the Marks and Spencer Pension Trust, said: “We’re pleased to announce the purchase of this additional buy-in policy, providing another important contribution to the Trustee’s ongoing objective of reducing the longevity risk in the Scheme to increase the security of all members’ pensions. Through a collaborative approach with the Company and our existing relationship with Aviva, we were able to act quickly and benefit from the market opportunities seen during 2020 to complete a further well-priced transaction.”
Myles Pink, Partner at LCP, said: “The M&S Pension Scheme has been able to take a further step to remove longevity and other risks, building on the thorough preparatory work carried out for its previous buy-in transactions. The Scheme has again demonstrated how well-prepared pension schemes that are flexible in their approach and have umbrella terms in place can efficiently lock into market opportunities when they arise."
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