Aberdeen City Council Transport Fund completes £230m buy-in with Rothesay

The Aberdeen City Council Transport Fund has completed a £230m pensioner buy-in with Rothesay.

The deal insures the benefits of 1,360 retired FirstGroup employees, covering £230m of the schemes’ approximately £300m of liabilities.

It is the scheme’s first buy-in policy and Rothesay’s first deal with a Local Government Pension Scheme (LGPS).

Additionally, the Aberdeen City Council Transport Fund is only the second LGPS to secure liabilities through an insurance policy.

The transaction was led by Mercer, acting for Aberdeen City Council, with Brodies providing legal advice to the fund. Legal advice to Rothesay was provided by Linklaters.

FirstGroup group pensions manager, Ian Hodgson, commented: “This buy-in is the culmination of a project to sustainably de-risk our Scottish LGPS Funds.

“After the successful merger of our obligations from the Strathclyde Pension Fund, this buy-in has removed £230m of pensions risk from the company, securing the pensions for some 1,360 members in the process.

“Transactions with the insurance market are not commonplace in the LGPS, and we are grateful to both Rothesay and the fund for their work in making this an attractive de-risking option for employers and funds alike."

Aberdeen City Council pensions manager, Laura Colliss, added: “We are very proud to be able to offer our members the protection to their pensions and peace of mind that this insurance policy provides. This transaction underscores the commitment to meeting the pension obligations and places the Fund and the tax-payer in a strong position for the future.”

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