Investment - Articles - Aviva announce bulk annuity deal with Wyeth Group Pension

Aviva have announced it has completed a £190m bulk purchase annuity buy-in transaction with the Trustees of the Wyeth Group Pension and Life Assurance Scheme (1997). The sponsoring employer, John Wyeth & Brother Limited, is part of the Pfizer Group which is one of the world’s largest biopharmaceutical companies.

 Aviva will insure the defined benefit (DB) pension liabilities for approximately 2000 members, removing the investment and longevity risk of these members from the Scheme. The transaction also makes use of Aviva’s innovative Defined Benefit and Contribution Plan, which will ultimately secure benefits for those members with both defined benefit and defined contribution (DC) arrangements following a period after the initial buy-in transaction.

 The process to select an insurer and negotiate terms was led by Mercer on behalf of the Trustees, with Allen & Overy LLP providing legal advice.

 Jamie Cole, Head of Bulk Purchase Annuity Origination at Aviva, said: “We’ve worked closely with the Trustees and their advisers and are delighted to have helped secure benefits for these members. Our Defined Benefit and Contribution Plan allows both DB and DC arrangements to continue to be held under a single arrangement with Aviva, providing the members with greater flexibility at retirement”.

 Debbie Berney, Chair of Trustees Wyeth Group Pension and Life Assurance Scheme, said: “We welcome this transaction as our second phase in ensuring the Scheme is able to meet the full costs of its future pension payments to all members. This has only been achieved by considerable dedication from the Trustees working in partnership with their advisors Mercer, Allen & Overy and FTI Consulting, to achieve this attractive transaction with Aviva, as part of the de-risking plan for the Scheme.”

 Patrick McKenna, Senior Director International Pensions at Pfizer, said: “This is another important step for the Scheme and wider Group as we seek to secure members’ benefits and reduce the risk exposures of our pension arrangements. Aviva put forward attractive pricing and innovative proposals to address a complex set of benefits, and we are pleased to partner with them on this transaction."

 Deborah McWhinney, Risk Transfer Principal at Mercer, said: “We are delighted to have been able to work with the Trustees to bring the Scheme to the market and achieve such a successful transaction. This is an important milestone for the Trustees in their de-risking journey and represents an impressive outcome for the long term security of members’ benefits.”

 Suthan Rajagopalan, Risk Transfer Partner at Mercer, said: “As a follow on to the Trustees’ pensioner buy-in in 2018, the challenge was how to cost effectively insure the residual deferred pensioners. Mercer was pleased to deliver the Trustees both highly competitive market pricing and terms, including a price lock to Scheme assets. This deal’s attractive pricing was in part driven by the trend of improved longevity reinsurer appetite and innovation for deferred pensioner pricing which Aviva was able to tap into for the benefit of the Scheme’s membership as a whole.”

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