M&G has completed a £60m bulk purchase annuity (BPA) transaction with an unnamed pension scheme, securing the benefits of more than 750 members.

The deal was executed through M&G’s wholly owned subsidiary, the Prudential Assurance Company.

M&G completed an illiquid asset transfer through its With-Profits Fund to facilitate the BPA deal.

The fund entered into a simultaneous market transaction to purchase an illiquid asset in-specie from the pension scheme.

The insurer noted that this would typically pose a hurdle to insuring member benefits, but its ability to invest in illiquids through the With-Profits Fund allowed a solution to be reached.

Gallagher provided the pension scheme trustee with advice, having been appointed as risk transfer broker last year.

The firm worked to prepare the scheme for transaction and deliver strategic advice on the trustee’s options for illiquid assets.

Its project management framework meant the scheme moved from the initial BPA stages to execution in under six months.

Independent governance Group acted as the scheme’s independent trustee, while Sackers provided legal advice on the transaction.

“We are pleased to have partnered with M&G on this transaction,” commented Independent Governance Group chair of trustees, Roger Mattingly.

“Their bespoke solution in addressing the trustee’s illiquid asset challenge was instrumental in achieving the objectives of both the trustee and the sponsor.

“I would like to extend my gratitude to our risk transfer advisers, Gallagher, whose expert guidance, and strong project management ensured a seamless and efficient process.

“I would also like to thank our legal advisers, Sackers, for their clear and pragmatic advice throughout. This collaboration has delivered a fantastic outcome for the long-term security of member benefits."

M&G head of bulk annuity origination & execution, Rosie Fantom, said the deal showed how the insurer can provide tailored solutions for schemes of all sizes facing particular challenges.

“By accepting the illiquid asset in-specie, in a mutually beneficial transaction, we were able to resolve a major obstacle for the trustee, allowing the pension scheme and sponsor to reduce risks by insuring members’ benefits,” she continued.

“We look forward to supporting more schemes as they navigate their de-risking journeys and achieve greater certainty for members.”

Gallagher senior risk transfer actuary, Callum Slattery, added: “It was a privilege to advise the trustee on this unique transaction.

“M&G demonstrated a willingness to understand the scheme’s specific needs and work creatively with the trustee to address the challenge posed by the scheme’s illiquid assets.

“I am grateful to M&G, the IGG team and our co-advisers for their collaboration and shared appreciation for the scheme’s objectives. This collective effort has delivered an outstanding result for members.”

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