Reach pension scheme completes £120m buy-in with Rothesay

The West Ferry Printers Pension Scheme has completed a £120m full buy-in transaction with Rothesay, securing the benefits of 263 members of the scheme who were not included in previous transactions.

The transaction was led by LCP, acting on behalf of the scheme, with legal advice provided by Simmons and Simmons.

Meanwhile, Reach, the parent company of the scheme's sponsor, was advised by Willis Towers Watson, with legal advice provided to Rothesay by Travers Smith.

Rothesay previously reached an agreement with Reach and the scheme trustee in December 2020 to fully fund the scheme as part of a business restructuring.

During December, the insurer worked with LCP to price scheme benefits, in turn providing a transactable price for both Reach and the scheme to consider.

A transparent price mechanism, which was guaranteed over the Christmas and New Year period, then allowed the trustee to move the assets into a portfolio, in an effort to provide Reach with greater price certainty, before the transaction was executed in mid-February.

In addition to the reliance on a transparent price mechanism, the transaction was highlighted as “unusual” as over 90 per cent of the liabilities relate to deferred pensioners making the liabilities particularly long-dated.

LCP partner, Laura Davies, explained that the pricing was fixed within four weeks of data being available to fit with the wider timescales, highlighting this as a particularly rapid timescale in such a busy market.

“This was achieved thanks to a collaborative approach by all parties and the team’s experience at transacting with insurers such as Rothesay,” she stated, also explaining that there are continued "attractive pricing opportunities" for long-dated liabilities.

"Many schemes are realising that they are closer to full insurance than they thought. We expect to see more schemes taking advantage of this in 2021," she stated.

Commenting on the transaction, West Ferry Printers Pension Scheme chair of the trustee, John Pannett, said: “We are delighted to have now secured the pension benefits for all members of our scheme, achieving our goal of providing members with long-term security.

“It is a testament to the expertise of our advisers and Rothesay’s ability to move quickly that we were able to meet the ambitious timetable required to achieve this positive outcome.”

Rothesay head of business development, Sammy Cooper-Smith, added: “When trustees or sponsoring employers need to move quickly to secure member benefits for the long term, we want to be their first choice.

“We are pleased to have been able to offer certainty to the trustee, sponsor and, most importantly, the members in such a short timescale.

“The bulk annuity market performed well in 2020, despite the uncertainty and disruption caused by the Covid-19 pandemic, and we see strong demand from schemes of all sizes to finalise de-risking plans in 2021.”

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