Morrisons pension scheme agrees £762m buy-in with Rothesay

The 1967 Section of the Morrisons Retirement Saver Plan has agreed a £762m buy-in with Rothesay, securing the pension benefits of more than 8,000 members.

The deal secured the benefits for all uninsured members of the scheme following a previous buy-in, including around 2,650 pensioners and dependents and around 5,500 deferred members, meaning that all defined benefit (DB) liabilities of the scheme are now secured.

The transaction required no contribution from the sponsoring employer, Morrisons Supermarkets, and was achieved through an accelerated process, which allowed the trustee and company to "lock in" security for members quickly when the opportunity arose.

The policy was also structured to accommodate the scheme's illiquid asset run off.

Aon acted as the lead broker on the transaction for both the trustee and the sponsoring employer, while legal advice was provided to the scheme by Clifford Chance and to Rothesay by DLA.

Commenting on the deal, chair of trustees, Steve Southern, stated: “We are delighted to have now achieved pension security for all members of the plan.

"We worked hard with the company and our advisers to enter the market in a position to act quickly and I am very pleased that Rothesay was able to match our ambition, executing quickly and providing certainty over pricing and asset run off.”

Rothesay business development, Róisín O’Shea, also highlighted the accelerated process executed as “testament to the high-quality preparation by the plan and its advisers".

“The demand for de-risking is the strongest we have ever seen and our significant capital surplus, combined with our ability to operate at speed while delivering bespoke solutions, means we are very well-placed to help schemes provide pension security for their members in this very busy market,” she stated.

Adding to this, Aon partner, John Baines, said: “We were able to help the trustee and company act quickly to capture the market opportunity that arose towards the final quarter of last year when scheme funding significantly improved due to considerable movement in bond yields.

"They were ready to take it due to five years of buy-in preparation, a robust strategy and a nimble decision-making framework. As a result, the benefits for all members are now secured by insurance policies.”

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