Pace completes third buy-in of 2020 for £400m

The Co-operative Pension Scheme (Pace) has completed a £400m buy-in with the Pension Insurance Corporation (PIC), covering liabilities for around 2,000 members in the bank section of the scheme.

Having been completed in April 2020, this is the Co-op’s third buy-in deal of the year, and second with PIC.

The company successfully completed it’s first buy-in, for £1bn, with Aviva in January, securing benefits for around 7,000 members.

A subsequent buy-in, also priced at £1bn and securing benefits for a further 7,000 scheme members, was then completed in February with PIC.

The latest buy-in's process was led by Aon, with trustees receiving legal advice and investment advice from Linklaters and Mercer respectively, as in previous transactions.

PIC again again advised by Herbert Smith Freehills.

Co-operative Bank chief people officer, Tracey Kneller, said that the buy-in represented a “positive step” in the management of the scheme, emphasising the “good work of the trustee” in continuing to follow its de-risking strategy.

Whilst the Covid-19 pandemic has created market volatility, industry experts recently argued that there was resilience in the bulk annuity market, as demonstrated by March activity.

Aon Risk Settlement Group partner, Stephen Purves, echoed this, highlighting that while the current market volatility had presented pricing opportunities, the “key to success” for Pace had been close price monitoring, as well as being ready to execute “quickly and efficiently” when an opportunity arose.

Co-operative Pension Scheme trustee, Chris Martin, added: “I’m delighted to have completed this transaction with PIC, which improves member security, particularly in volatile markets.

“The PIC team was focused and efficient, and the streamlined process meant this was a smooth transaction.

“Our experience of PIC’s customer service following previous transactions meant choosing to work with them again was an easy decision.”

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