This transaction is Scottish Widows’ second bulk annuity transaction and follows on from the £400m pensioner buy-in with the Wiggins Teape Pension Scheme announced in November 2015.
The pensioner buy-in covered a tranche of the scheme’s pensioner liability, and is the continuation of the scheme’s de-risking strategy, following a previous buy-in completed in 2014. The Trustees were advised by KPMG.
Barloworld is a distributor of leading global brands with operations in over 20 countries. The company is a client of Lloyds Banking Group’s commercial banking division in the UK.
Scottish Widows, the Trustees and Barloworld worked together to develop the transaction timetable which enabled the arrangement to be completed quickly following exclusivity.
Andrew Bannister, Chairman of Trustees for the Scheme, said: "This buy-in is part of our long-term strategy to de-risk our pensioner liabilities and I am very pleased that we have been able to complete this arrangement with Scottish Widows following a competitive process run by KPMG. The Scottish Widows’ team has been flexible and responsive to our needs in helping us to complete the buy-in on attractive terms."
James Staveley-Wadham at KPMG, said: “Having already advised the Trustees on their previous pensioner buy-in, KPMG and the Trustees worked together to identify and execute a further insurance transaction. The Trustees and KPMG have continued to monitor pricing and at the start of 2016 decided to proceed with a second buy-in. Having already transacted once, the market reacted favourably to the second tranche and we were able to secure competitive terms with Scottish Widows. The experience of the first buy-in was put to good use, with the Trustees and KPMG being able to agree contractual terms and execute quickly.”
Mike Edwards, Head of Origination and Structuring, 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. Their proactivity, along with the preparatory work they had done with their advisers, meant they were able to conclude the transaction in a shortened timescale. Barloworld is an important client of Lloyds Banking Group's commercial banking division in the UK and we are pleased to strengthen an existing relationship through this arrangement."
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