Thomas Crawshaw, of K3 Advisory, commented: “This is a particularly satisfying deal as it clearly demonstrates that K3 can secure terms, transact deals and transfer assets for small schemes in a way that has often only been accessible to larger UK schemes and employers. Being able to provide the same level of security in retirement for employees of small UK businesses at a competitive price is absolutely key, and what makes us tick.”
“The scheme had already insured the benefits for more than 20 members in 2009 through a buy-in with Rothesay (Aegon at the time). K3’s pragmatic approach to smaller schemes meant we were able to work with Rothesay to provide a quote under exclusivity, to insure the remainder of the scheme’s liabilities and adjust the existing buy-in policy to exactly match the scheme benefits. This means the whole scheme is now insured with the same provider and well on its way to a full buy-out and eventual wind-up. This transaction covered c£6m of previously uninsured liabilities, with total liabilities now covered of over £10m.”
Keir O’Donnell, of Cartwright, commented: “We have worked hard with the Trustees on their funding and investment strategies, as well as making sure the Scheme’s data and benefits were ‘transaction ready’, so it is gratifying that such an attractive transaction came together so quickly, especially as it allowed the Scheme to smoothly deal with the original buy-in at the same time. We are pleased to have successfully completed another transaction working closely with K3 and look forward to our partnership helping our clients achieve such positive results again in the future.”
The scheme’s Chair of Trustees commented: “We were very keen to secure the benefits of the remaining members and were expecting the sponsor to be required to make a contribution to fund the buy-out. Working collaboratively, Rothesay and K3 were able to structure a transaction which locked in market conditions within the schemes assets, providing much welcomed certainty.”
Cleo Taylor Smith, of Rothesay, commented: “Over the years, we have accumulated over one hundred buy-in contracts for smaller schemes, predominantly through transactions with Aegon, Zurich and MetLife. As the UK’s largest pensions insurance specialist, we are committed to providing solutions to all of our clients to help them de-risk and buy out. Despite the relatively small size of the deal, after discussion with K3 and the Trustees we were happy to provide a price lock on the premium, spanning the Christmas and New Year period. This gave the Trustees and sponsor absolute certainty and removed all market risk before the transaction completed.”
Other points to note:
Cartwright are also scheme actuary, investment adviser and administrator. Legal advice to the Trustees was provided by CMS.
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