A key feature of the buy-in was that following the competitive selection process, the Trustees were able to afford to insure an enhancement to members’ benefits to remove the cap on price inflation linked pension increases in payment, meaning members with price inflation increases get full protection against future high inflation.
LCP was lead transaction adviser for the Trustees with Burges Salmon providing legal advice.
Nick Bentley, Chair of the Trustees of the RiverStone Management Pension and Life Assurance Plan, said: “Based on the pricing achieved and the full support of the sponsor we were delighted to be able to secure our members with Standard Life, and in addition provide enhanced benefits so that our members with inflation linked benefits are fully protected against the potential of high inflation in the future.”
Rhian Littlewood, Senior Business Development Manager at Standard Life, commented: “Ensuring the security of members’ benefits is at the very heart of DB de-risking activity and we are delighted to have provided this by locking in the benefits for all 388 members of the Plan. This is a prime example of how open communication and a fully collaborative approach between all parties supports effective decision-making and can improve member outcomes, in this instance, by providing full inflation proofing for members – an invaluable benefit in the current climate.”
David Stewart of LCP said: “The Trustees completed significant amounts of preparation for this buy-in to ensure they had high certainty around the benefits and quality of data in the Plan. This preparation put them in the prime position in a busy market driving a competitive process. The attractive pricing meant the Trustees could afford to enhance member benefits providing full inflation-proofing. Recent high inflation levels have shown how pensions can be quickly eroded in real terms so this enhancement provides a real long-term benefit for the members.”
Richard Pettit of Burges Salmon added: “We were extremely pleased to be able to support the Trustees in securing member benefits in full, with additional protection against inflation. The preparatory work carried out by the Trustees to review the governing documentation and obtain certainty on the benefits due under the Plan was vital in allowing the transaction to proceed so quickly and smoothly – ensuring a positive outcome for members.”
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