The Electricity North West Group Trustee and Electricity North West Limited’s first pensioner buy-in represents a significant step on the Group's long term de-risking journey, providing additional security and greater stability to members, Electricity North West Limited, shareholders and consumers.
The Trustee received transaction advice from Aon and Sackers with support from the Aon Scheme Actuary and the KPMG investment team. Scottish Widows was advised by Herbert Smith Freehills for this insurance de-risking arrangement. Electricity North West Limited was advised by the KPMG pensions team.
Emma Watkins, Director of Bulk Annuities at Scottish Widows, said: “We are proud to have been chosen by the Trustee and Sponsor to help them take a material step towards de-risking the Group and providing increased security to members.
“The successful completion of the transaction was testament to a successful collaboration between Scottish Widows, the Trustee and our advisers to develop and execute a well-defined strategy and timetable and we look forward to becoming a long-term partner.”
Malcolm Sugden, Chairman of Trustee for the Scheme, said: “The Group's funding level has improved significantly in recent years and this transaction allows us to lock in some of that positive performance providing security to our members and other stakeholders.
“Aon’s effective and expert advice enabled us to achieve attractive terms in a period of heightened market volatility. Our other advisers (Sackers and KPMG investment team) should also be thanked for the advice and work in successfully delivering the buy-in.”
David Brocksom, CFO at Electricity North West Ltd, said: “The transaction represents a significant step in the long-term pensions de-risking strategy, reducing material risk to our customers.
“Given that the transaction could extend the deficit repair period funded by our customers, we sought advice from KPMG and consulted widely with customers to ensure that it was in their interests.”
Michael Walker, Principal Consultant at Aon, said: “By advising the Trustee on this buy-in, we have continued our long-term strategic partnership with the Electricity North West Group. Our deep knowledge of the Electricity Supply Pension Scheme was crucial in ensuring the annuity contract met the unusual transaction requirements of this industry-wide scheme and provided an excellent outcome for all parties.
“Aon has advised all the Electricity Supply Pension Scheme bulk annuity transactions completed to date and we expect to see further activity in this sector in 2020 and beyond.”
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