Rothesay Life, a leading life insurer specialising in providing de-risking solutions to UK defined benefit pension schemes, is pleased to announce that it has completed a £1.6 billion bulk annuity with the Civil Aviation Authority Pension Scheme (the “Scheme”).
The transaction, which insures a proportion of the Scheme’s liabilities with Rothesay Life, is the largest de-risking transaction completed so far in 2015 and is the second largest buy-in ever secured by a pension scheme in the UK. Rothesay Life has now written £3.4bn of new business year-to-date in 2015.
The Trustees were advised by Aon Hewitt and Reed Smith. Rothesay Life were advised by Wragge Lawrence Graham and Co.
Commenting on the transaction Rothesay Life’s Managing Director, Tom Pearce, said: “We are delighted to have completed such a significant transaction with the CAAPS and Aon. The deal is further evidence of the increasing maturity of the bulk annuity market and an endorsement of Rothesay Life as a leading player in it. Our strong capital position and cautious approach to risk management leaves us well positioned to take advantage of growth opportunities.”
Joanna Matthews, Independent Chair of the Civil Aviation Authority Pension Scheme, said:
“The Trustee is delighted to have been able to achieve a significant reduction in the level of risk for the Scheme and its members as a result of this transaction, which has been carried out in consultation with the CAA. The staff of CAAPS, our advisers and Rothesay Life have collaborated very professionally and in a highly efficient manner to achieve this excellent outcome for the Scheme. The transaction went extremely smoothly thanks to the very high quality of our data and processes.”
Paul Belok, partner in Aon Hewitt's Risk Settlement Group, said:
“We carried out a full market review on behalf of the Trustee, including due diligence advice on financial strength and administrative capabilities, which resulted in the selection of Rothesay Life as the preferred provider. We were also able to agree with Rothesay a mechanism which meant that the Trustee clearly understood how the premium would move whilst final details including legal documentation were being addressed, with these movements being closely mirrored by the value of relevant Scheme assets. This transaction is further evidence of Aon Hewitt's leading position in the risk settlement market.”
Simon Hartley, partner in Reed Smith’s London pensions group, said:
“We are delighted to have assisted our long standing client, the Trustee of the Civil Aviation Authority Pension Scheme, in achieving this excellent result which benefits everyone involved with the Scheme.
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