William Hill has revealed it has completed a buy-in with Just Group for £180m.
Publishing its half-year results today, 3 August 2018, the bookmaker said a buy-in bulk annuity was signed by the trustees of the pension scheme in May 2018, to insure a proportion of the defined benefit obligation against the risk of rising costs in the future.
Speaking to Pensions Age, William Hill said it formed a joint working group advised by KPMG, "enabling them to take advantage of a dynamic market that requires schemes to be nimble and focused".
"Having obtained quotations from six of the eight insurers in the market, Just was selected to secure around 75 per cent of the pensioner liabilities, with the £180m policy being incepted within eight days of Just being selected. The pricing achieved meant that the corresponding asset de-risking objectives were achieved within the required return tolerances."
The scheme’s assets decreased by £28.8m, which arose primarily due to the buy-in. As a result, assets at 26 June 2018 were £29.9m, compared to £58.7m.
The scheme’s last triennial valuation revealed a funding surplus of £1.5m as at 30 September 2016. The group agreed to pay £8.8m per annum towards the scheme until December 2019. In addition, it contributes £1.9m per annum towards the cost of insured death benefits and other administrative expenses of running the scheme.
Commenting, William Hill group reward director Ed Airey said: “The company was delighted at being able to work jointly with the trustees and KPMG to complete a successful transaction. We have significantly reduced risk in the scheme without compromising our journey plan, and also now have a platform in place to secure further liabilities at opportune moments in the future.”
