ABI Pension and Assurance Scheme completes £26m buy-in with Aviva

The Association of British Insurers (ABI) Pension & Assurance Scheme has completed a £26m bulk purchase annuity buy-in with Aviva, insuring the defined benefit (DB) pensioner liabilities for 191 members.

The transaction will remove the investment and longevity risk of these members from the scheme, with members seeing no change in the amount of their benefits or the way in which they are paid.

It represents the second transaction between Aviva and the ABI Pension & Assurance Scheme, following the completion of a £10m transaction in 2017.

Mercer led on the competitive tender process to select an insurer and negotiate terms, whilst legal advice was provided by Shepherd and Wedderburn LLP.

Commenting on the deal, ABI Pension & Assurance Scheme trustees chairman, Philip Exact, said: “We worked closely with the ABI and Mercer over the last 12 months to plan, and then take, this important step on our journey to further reduce the scheme’s risks.

"Aviva were selected after a competitive tender process and we are very pleased to have successfully completed this transaction.”

Aviva head of bulk purchase annuity origination, Jamie Cole, added: “We are delighted to have completed a second transaction with the Association of British Insurers Pension & Assurance Scheme.

"All parties worked closely to ensure the smooth and efficient completion of this transaction which provides greater security for scheme members and shows Aviva’s flexibility in transacting with schemes of all sizes.”

Mercer risk transfer principal, Deborah McWhinney, also highlighted the transaction as a “significant step” for the trustees and their de-risking journey, as well as a positive outcome for the long term security of member benefits.

She continued: “We are very pleased to have been able to work with the trustees again and bring this second tranche of pensioners to the market.

"Despite ongoing uncertainty, we continue to see pension schemes concentrating on de-risking activity and we are looking forward to seeing more transactions throughout the year."

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