Duo of pharma schemes secure £22m joint buy-in with Just Group

Two schemes sponsored by the same drug development and healthcare company have completed a £22m joint buy-in with Just Group.

The combined value of the schemes consisted of two transactions, led by Cartwright Benefit Solutions and K3 Advisory, for £16.5m and £5.5m.

The chairs of the trustees for the unnamed schemes commented that the "smooth" transaction process had allowed them to benefit from the good pricing in the market, adding that they were “really pleased that both schemes could transact together and get the same insurance terms”.

The schemes were advised by Cartwright Benefit Solutions, H&C Consulting Actuaries LLP, Wrigleys Solicitors LLP, Ascot Lloyd and Lincoln Pensions.

“Our client had already insured some of its pensioner liabilities and was looking to further reduce the scheme risk by ‘top-slicing’ the largest liabilities," explained Cartwright Benefit Solutions director of investment consulting, Sam Roberts.

“The trustees’ and company’s close working relationship for many years, joint understanding of the investment strategy, and ability to consider and make decisions promptly, was vital in allowing the schemes to quickly take advantage of this unexpected opportunity when it arose.

"This is the second transaction in quick succession we have completed working with
K3 and I look forward to achieving similarly positive outcomes for more of our clients
in the future as they seek to reduce their pensions risks."

K3 Advisory managing director, Adam Davis, noted that Covid-19 caused disruption to the investment markets presented beneficial opportunities for sponsors of schemes looking to de-risk.

He added that ensuring the schemes were “transaction ready” had allowed the advisers to “make the most of the current market and quickly secure highly competitive pricing with insurers”.

Davis continued: “In this transaction we were also able to materially improve efficiencies and drive down the pricing because both schemes had a common sponsor. This helped us achieve an outcome better than a gilts return for both sets of trustees, allowing them to secure members’ benefits at a better price than they might have expected.”

Just Group business development manager, Peter Jennings, said: “Transaction size can be a factor when selecting deals. At Just we choose to engage with schemes approaching market that have a clear and well-developed execution plan.”

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