Castings' schemes complete £72m Aviva buy-in

Castings’ two final salary pension schemes have completed a £72m bulk annuity insurance buy-in with Aviva Life and Pensions UK.

The full scheme buy-ins secured an insurance asset from Aviva that fully matches, subject to final price adjustment of the bulk annuity pricing, the remaining pension liabilities from both schemes.

The iron castings manufacturer was advised by Mercer during the transactions, which were completed in December 2019 and provided security for all members.

The buy-in covers the investment, longevity, interest rate and inflation risks in respect of the schemes and therefore "substantially reduces the pension risk to Castings PLC", according to the announcement.

Whilst the final position remains subject to a pricing adjustment following data and benefit verification, the deal has not required Castings to contribute any additional funding into the schemes.

Casting anticipates that there will be a surplus remaining once the data and benefit verification process has been completed.

The firm and the scheme trustees will agree on the treatment of "any surplus that might exist" when the final position is known.

Mercer risk transfer team principal, Joanna Carter, said: "The trustees were able to move quickly, selling their growth assets and aligning against Aviva’s price-lock portfolio before the recent market falls.

"The very favourable deal they secured improved the security of their members’ benefits, despite the current economic uncertainty.

“We are still seeing very attractive opportunities available in the market for schemes that can move forward decisively when the timing is right.”

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