This transaction was completed in March 2024 and secures the benefits of over 3,000 members, including almost 1,400 pensioners and over 1,650 deferred members. The complex transaction included dovetailing the process with a secondary market sale of an illiquid asset and deferral of premium to enable the buy-in shortfall to be met by a continuation of the existing schedule of contributions.
LCP were lead pension risk transfer adviser on the transaction. Legal advice was provided to the Trustee by Brodies LLP Solicitors and to Just Group by Gowling WLG alongside Just Group’s internal legal team.
Just Group reported total Defined Benefit (DB) sales (including DB partner sales) in 2023 of £3.4bn, up 21% on the previous year. It completed 80 transactions which is estimated to be over one-in-three of all deals completed in the market in 2023, more than any other provider.
Kishan Radia, DB Business Development Manager at Just Group, said: “This deal is an example of how effective communication and teamwork enabled Just Group to deliver a bespoke solution for a well-prepared scheme to secure member benefits. Working closely with the Trustee and advisers, we developed an appropriate price lock and premium deferral structure that worked for all parties. This transaction is further evidence of a vibrant bulk annuity market that’s working for schemes of all sizes. At Just we’re able to help schemes, big or small, by tailoring solutions that meet their needs.”
Bob Hymas at BESTrustees and Trustee to the Scheme, added: “This was a collaborative process to achieve a positive solution tailored to the Scheme. Just Group worked closely and flexibly with all advisers to determine a suitable price lock for the Scheme’s circumstances alongside a premium deferral structure that dovetailed with the Scheme’s funding plan. We are delighted to have secured the pensions of the Scheme’s members.”
Ruth Ward, Principal at LCP, commented: “We are pleased to have advised the Joint Working Group on this transaction, which provides additional security for members’ benefits in a carefully designed transaction that locks in a favourable position for the Trustee and Sponsor. This transaction shows it is possible to build a strategy balancing the options available for a scheme across the insurance and secondary market for illiquid assets to give the Trustee a clear route to reaching their objective.”
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