Aviva completes £1.7bn buy-in with its own pension scheme

Aviva Life & Pensions UK has completed a £1.7bn bulk annuity buy-in transaction with its parent company’s DB pension fund.

Aviva will insure the pension liabilities of approximately 4,300 deferred and 1,500 current pensioners in the Aviva Staff Pension Scheme.

The company has said that the strong financial position of the scheme has led its trustees to complete their first buy-in as part of a long-term plan to de-risk the scheme.

Aviva chief financial officer, Jason Windsor, said that the deal was a result of the years of successful joint stewardship between Aviva and the scheme’s trustees to build up the financial strength of the scheme.

Meanwhile, his colleague, Aviva managing director of defined benefit solutions, Tom Ground, said that the transaction showed that Aviva can service a “wide variety of schemes in the market”.

Hymans Robertson partner and lead adviser on the transaction, Michael Abramson, added: “Despite political uncertainty and market volatility, 2019 has already proven a record year for the bulk annuity market, with total transaction volumes in excess of £36bn.

"Buy-ins such as these show how insurance can be a meaningful part of the de-risking strategy for even the largest pension funds.”

Aviva Staff Pension Scheme chair of the trustee board, Brian Bussell, explained that, along with its existing longevity swap, the buy-in means that the scheme had now hedged “a material amount” of longevity and investment risk.

Back in 2014, the scheme transferred some £5 billion of liabilities to Swiss Re, Munich Re and SCOR Global Life in a longevity swap for 19,000 of its members.

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