Kingfisher Pension Scheme completes £900m buy-in with Aviva

The Kingfisher Pension Scheme has completed a £900m bulk purchase annuity transaction with Aviva, insuring the defined benefit (DB) pension liabilities for over 8,000 members.

As a result, Aviva will take responsible for the investment and longevity risk of these members, although members themselves will see no change in the amount of their benefits or the way in which these are paid.

The transaction is the third bulk annuity transaction undertaken by the scheme, following a £200m buy-in with Pension Insurance Corporation in 2018 and a £230m transaction with Legal & General in 2016.

The insurer selection process and negotiation of terms was led by Aon, whilst actuarial advice was provided to the trustee by Hymans Robertson.

Legal advice, meanwhile, was provided to the trustee by Eversheds Sutherland and to Aviva by DLA Piper.

Kingfisher Pension Scheme chair of trustees, BESTrustees’ Clive Gilchrist, highlighted the announcement as "great news for our members".

"The trustee, with support from the Kingfisher pension executive team and our external advisers, has successfully completed a third buy-in and secured these existing pensioner members’ benefits through Aviva Life & Pensions UK limited, an insurer which has strong financial credentials and a track record of excellent customer service," he stated.

Aviva head of bulk purchase annuity origination, Jamie Cole, added: “Kingfisher is a leading multinational retailer with a strong presence in the UK and we’re proud to have helped the trustees of the pension scheme to secure benefits for their members.

“Throughout the process we’ve been working to an ambitious timeline and thanks to the expertise and collaboration of all parties we completed the transaction within three weeks of exclusivity.”

Aon head of bulk annuities, John Baines, also explained that the first half of 2021 had seen a "relatively modest" level of activity in the bulk annuity market, in turn creating an opportunity for the trustee to "move quickly to capture excellent market pricing".

"This third, and largest, buy-in transaction in which Aon has worked with the Kingfisher trustee really demonstrates the value of developing a clear strategy," he continued.

“The tried-and-tested decision-making framework allowed them to use their previous experience to once again benefit scheme members."

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