Coats UK Pension Scheme completes £350m buy-in with Aviva

The Coats UK Pension Scheme has completed a £350m bulk purchase annuity buy-in transaction with Aviva, securing the benefits of around 3,700 members.

The deal will remove the investment and longevity risk of these members from the scheme, although members will see no change in the amount of their benefits or the way in which they are paid as a result of the transaction.

The deal was instigated by a joint working group of the scheme’s trustees and Coats Group plc management, which was established to build on past risk management actions and set the scheme on a journey towards full insurance.

The scheme trustees received advice throughout the process from LCP, Redington, and Sackers, while Coats was advised by Isio.

Coats CFO, Jackie Callaway, highlighted the completion of the buy-in as a reflection of the "constructive and collaborative working relationship between Coats and the trustees, with Aviva helping us to achieve our objectives".

Coats UK Pension Scheme trustee chair, Chris Martin, added: “We are delighted to have taken this further step in improving the security of members’ benefits”.

“The collaboration between the trustees and company and our respective advisers, including the outstanding support from our pensions office, has been absolutely at the heart of being able to deliver this outcome,” he continued. “Aviva’s sustainability commitment, and its alignment with our beliefs, was a key factor in the selection of our buy in partner.”

Adding to this, Aviva head of bulk purchase annuity origination, Jamie Cole, stated: “We’re extremely pleased that the trustees of the Coats UK Pension Scheme selected Aviva to support their de-risking journey.

"All parties worked collaboratively on this transaction which secures the benefits for a significant proportion of the scheme’s members and supports the sponsor’s long-term ambition to remove risk from their balance sheet.

“It is clear that Aviva’s sustainability commitment played an important part as it aligns with Coats’ own views.”

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