Scottish Widows has completed a c.£340m partial scheme buy-in with Ford UK Pension Scheme.
The deal, with Ford Pension Scheme for Senior Staff, was announced today (11 September).
Aon was the lead transaction adviser while Mayer Brown and Hogan Lovells provided legal advice to the Ford pension scheme.
And PAN Trustees UK LLP provided independent professional trustee support.
Scottish Widows was advised by Eversheds Sutherland.
Scottish Widows head of origination and structuring Matt Wilmington said: “Since September 2022, the bulk annuity market is seeing unprecedented demand and we have focused on adapting to this new environment.
“This transaction is testament both to the speed at which we have adapted and the value of the preparatory work to help schemes place themselves well in the market. We are proud to have secured these benefits for the scheme’s members through working closely and effectively with the teams involved.”
Hannah Brinton, associate partner at Aon, added: “The outcome achieved for the scheme and members shows that attractive pricing opportunities and terms are available for pension schemes which are fully prepared and have robust governance in place.”
The buy-in scheme is an insurance policy that covers a proportion of the pension scheme’s liabilities and is held as an asset by the scheme.
The policy removes the risks of investment, longevity, interest rate changes and inflation for the members covered by the policy.
It can cover a subset of the liabilities allowing ‘partial de-risking’ for example, deferred pensioners, current pensioners, or subsets of either.
Trustee board chair Lucy Millar said: “It is pleasing to achieve this significant further de-risking step that will provide greater security for our members’ benefits. The collaborative approach between all parties enabled fast and effective decision-making which allowed the Scheme to capitalise on favourable market conditions.”
Ford UK pension scheme has thousands of members of staff enrolled in defined contribution (DC) or defined benefit (DB) arrangements.
The motoring giant has more than 120 different pensions schemes across 36 countries.
It spends approximately $1bn (£772,195,000) per year on pensions for its employees.
