Bank of America completes £400m buy-in with Scottish Widows

Bank of America Merrill Lynch UK Pension Plan has completed a £400m buy-in with Scottish Widows, it has revealed.

The deal will cover all 915 pensioner members in the bank’s largest pension scheme and is the third buy-in the bank has completed, following two transactions for its smaller pension schemes.

The bank was advised by Aon and Linklaters provided legal advice on the deal.

Bank of America Merrill Lynch UK Pension Plan trustee chairman, Peter Gibbs, said: “This transaction allowed us to continue our programme of de-risking by securing a bulk annuity for pensioner members on favourable terms, which has led to an improvement in the funding position on the plan's long-term funding basis.

“We are delighted with the advice and support provided by Aon and Linklaters throughout the transaction process, and to extend the bank’s existing relationship with Scottish Widows by entering this long-term partnership achieving greater security for members in the plan.”

Furthermore, Scottish Widows head of origination and structuring, Matt Wilmington, added that they were able to complete within weeks of being selected as the preferred provider.

"We are proud that the Trustees have chosen to insure members' benefits with us as part of their ongoing de-risking plan. Working collaboratively with Aon, Linklaters and the Trustees, we were able to deliver an attractive price and complete the transaction within weeks of being selected as the Trustees' preferred provider," he said.

Aon head of bulk annuities, John Baines, added: “As a financially sophisticated Trustee Board, understanding the additional security that could be provided to members through an insurance solution was a particularly important aspect of this transaction.

“Their understanding of market dynamics allowed the Trustees to navigate a busy market and quickly lock into great pricing.”

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