The Spirit (Legacy) Pension Scheme is one of the leading pub retailer and brewer’s, two final salary schemes. It has secured a £50m bulk annuity with Scottish Widows to cover some of the scheme's pensioners, with the intention of securing further annuities in the future when supported by the scheme's asset strategy and available market pricing. This annuity improved the return on scheme assets while reducing risk.
The approach of de-risking in tranches is a growing market trend. As a result, repeat buyers have represented over half of the bulk annuity market in recent years.
This transaction was run by Aon using its streamlined process on the market-leading Compass platform, which is designed to maximise insurer participation and enable a quick transaction from a winning bid. The success of this approach was demonstrated in the active involvement of Scottish Widows and other bidders who normally prioritise larger transactions.
This transaction included a very clearly defined annuity structure and pre-negotiated contracts provided through Eversheds Sutherland. Aon also provided due diligence advice integrated into the broking process to allow a quick decision.
Iain Urquhart, chairman of the trustees of the Spirit (Legacy) Pension Scheme, said: "The scheme has progressed well on its journey to providing full and permanent benefit security, and reaching this important landmark as part of the wider plan represents good progress."
Richard Smothers, Chief Financial Officer at Greene King, added: "I am pleased to take this important step in reducing the risk from our pension arrangements on attractive terms and to the benefit of our scheme members."
Dominic Grimley, Risk Settlement adviser at Aon, said: "Careful positioning using Aon’s Compass platform was a key element in obtaining strong pricing in a busy market and an efficient transaction. The trustees and company reacted quickly to capture a market opportunity, and the Scottish Widows team showed great commitment.”
Emma Watkins, Director of Individual and Bulk Annuities at Scottish Widows, said: "We are proud that the trustees have chosen to insure members' benefits with us as part of their ongoing de-risking plan. The preparatory work they had done with their advisers and the streamlined auction process allowed the transaction to be implemented smoothly."
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