Phoenix completes £144m buy-in with Aegon scheme

Phoenix Group has completed a £144m buy-in with the Aegon UK Staff Retirement and Death Benefit Scheme.

The bulk purchase annuity insurance policy covers around a quarter of the scheme’s uninsured pensioner liabilities and is the first buy-in of the trustees’ de-risking strategy.

The scheme was advised by Hymans Robertson and Burness Paull, the law firm.

Aegon pension scheme trustee board chair, Maurice Brunet, said: “This is a key milestone for the Scheme being the first buy-in as part of our long-term de-risking strategy.

"It helps to improve long-term security for all of our members by reducing the Scheme’s exposure to future investment and longevity risks.”

Phoenix Group head of bulk purchase annuities, Justin Grainger, said that the transaction takes Phoenix’s year-to-date bulk annuity volumes to approaching £2bn and further demonstrated the opportunities and growth within the bulk purchase annuity market.

In H1 2019, Phoenix had £0.5bn of bulk purchase annuity liabilities were contracted, and a £1.1bn buy-in from the PGL Pension Scheme was successfully completed.

Half a billion pounds (£0.5bn) of illiquid assets were also sourced, taking allocation of illiquid assets backing annuity liabilities to 22 per cent.

It also agreed a buy-in with the Marks and Spencer pension scheme in May 2019.

Earlier this year (June 2019) Phoenix revealed that it had achieved a cash generation of £287m in the first half of 2019, down from £349m in the six months to 30 June 2018.

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