The Scheme undertook a comprehensive risk review leading to the conclusion that managing down the overall longevity risk exposure was desirable subject to suitable pricing. The nature of the liability profile resulted in a need to collect individual medical data in order to allow insurers to underwrite the risk efficiently. The Trustees initiated a competitive tender process managed by Willis Towers Watson, with legal advice being provided to the Trustees by CMS Cameron McKenna LLP and MorganAsh providing medical data collection services.
Huw Davies, Chairman of the Trustees, said: “With just under 50 pensioner members to consider, it was vital that this buy-in not only provided demonstrable value but was also achieved in a smooth and timely manner. Willis Towers Watson led the negotiations in what proved to be a very competitive process – ultimately we chose Just Retirement as their pre-transaction medical underwriting represented the best solution for the Scheme.”
Joerg Boder, Group Chief HR and Communications officer, Aliaxis Group added: “Aliaxis are very pleased with the outcome of this process. Just Retirement have delivered a solution that has resulted in a significant reduction in the volatility of the Scheme’s funding position, and ultimately the Company’s balance sheet, providing a great outcome for members and the Company alike.”
Suzanne Vaughan, Specialist Bulk Annuity Advisor at Willis Towers Watson, commented: “Prior to this transaction the Scheme’s finances were subject to a considerable concentration of risk depending on the life expectancy of a small number of pensioners. The transaction was structured such that this risk was significantly reduced through insuring a proportion of the benefits payable to the highest income members. The pricing achieved in this transaction reflects an extremely attractive market currently”.
Tim Coulson, Director of Defined Benefit Solutions at Just Retirement, continued: “Working closely with Willis Towers Watson and the Trustees, we were able to use pre-transaction medical underwriting to provide Aliaxis with a highly competitive quote which met their exact standards. As momentum builds in the market, we expect to see more people exploring this approach and reaping the clear benefits.”
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