Transaction highlights:
After a successful period of investment, the Trustees of the Scheme have quickly moved to a fully de-risked position
Both TP ICAP and the Scheme members are now protected against longevity, investment and other risks associated with long-term liabilities from pensions in payment and deferred pensions
The pricing of the insurance policy was successfully locked to a portfolio of assets already owned by the Trustees providing price certainty during execution and ease of premium payment once executed
In the competitive process of choosing an appropriate insurer and negotiating terms, the Trustees were chaired by BESTrustees and advised by Aon Hewitt and Sackers. TP ICAP was advised by Allen&Overy and Rothesay Life by Gowlings WLG.
Guy Freeman, Co-Head of Business Development at Rothesay Life, said: “We are delighted to add the members of the Tullett Prebon Pension Scheme to our growing client base. This transaction is a further illustration of the momentum that Rothesay Life has in the pensions de-risking market at a time when that market is showing strong signs of growth.”
He continued “Pricing for long-duration bulk annuities continues to be lower than trustee estimates in our experience. As a result we’re seeing increased appetite from corporate sponsors in full de-risking and we’ll continue to focus on adding value in structuring and executing each transaction we work on.”
Clive Gilchrist, BESTrustees and Chairman of the Trustees of the Tullett Prebon Pension Scheme, said: “The Trustees’ first priority has been to ensure the future security of members’ benefits. The Scheme’s strong funding position prompted consideration of a bulk annuity covering the Scheme’s liabilities. Following a comprehensive review of insurance providers, the Trustees chose Rothesay Life on a combination of product structure, price certainty and the long-term security it brings as a low risk regulated insurer. With pricing being better than early estimates, all parties worked to agree the final price and terms over a short time, resulting in a secure outcome for the members of the Scheme.”
Andrew Baddeley, Chief Financial Officer of TP ICAP said: “TP ICAP fully supports the Trustees' decision to insure the defined benefit pensions of its pension scheme with Rothesay Life. This transaction will provide additional security for members of the Scheme and will also help to de-risk TP ICAP’s balance sheet.”
Dominic Grimley, Aon Hewitt and adviser to the Trustees, said: “The aim of the competitive tender process we ran for the Trustees was to ensure that the asset gains achieved by the Scheme were quickly locked in. We achieved the objective of removing the risk while fully securing benefits at an attractive price. Rothesay Life provided the certainty required, by locking the price to assets already owned by the Trustees and providing bespoke additional cover for data changes.”
Stuart O’Brien, Partner at Sackers – who provided legal advice to the Trustees throughout said: “The transaction provided a good opportunity for the Scheme to secure all member benefits in full. The innovative nature of the contract also covers-off a number of additional risks for the Trustees and it includes some useful flexibilities which are beneficial to the Trustees and the members. Sackers is pleased that the transaction proceeded efficiently and in line with a tight project plan thanks to the collaborative approach of all parties.”
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