Rothesay has completed a £6m follow-on buyout transaction with an unnamed pension scheme from the UK’s aviation sector.

The deal has secured the benefits of eight pensioners and 31 deferred members, with the transaction being led by Cartwright Benefit Solutions and interaction with the insurers being led by K3 Advisory.

K3 said the scheme had already insured the benefits for more than 20 of its members through a buy-in with Rothesay in 2009, with the new transaction insuring the remainder of the scheme’s liabilities and adjusting the existing buy-in policy to match scheme benefits.

As such, the firm noted that the scheme was “well on its way to a full buyout and eventual wind-up” after being wholly insured by the same provider.

Cartwright also served as scheme actuary, investment adviser and administrator, while legal advice to the trustees was provided by CMS.

The scheme’s chair of trustees said: “We were very keen to secure the benefits of the remaining members and were expecting the sponsor to be required to make a contribution to fund the buyout. Working collaboratively, Rothesay and K3 were able to structure a transaction which locked in market conditions within the schemes assets, providing much welcomed certainty.”

Rothesay business development director, Cleo Taylor Smith, commented: “Over the years, we have accumulated over one hundred buy-in contracts for smaller schemes, predominantly through transactions with Aegon, Zurich and MetLife. As the UK’s largest pensions insurance specialist, we are committed to providing solutions to all of our clients to help them de-risk and buy out.

“Despite the relatively small size of the deal, after discussion with K3 and the trustees we were happy to provide a price lock on the premium, spanning the Christmas and New Year period. This gave the trustees and sponsor absolute certainty and removed all market risk before the transaction completed.”

K3 Advisory senior actuarial consultant, Thomas Crawshaw, said the deal was “particularly satisfying” as it demonstrated that K3 could “secure terms, transact deals and transfer assets for small schemes in a way that has often only been accessible to larger UK schemes and employers”.

He added: “Being able to provide the same level of security in retirement for employees of small UK businesses at a competitive price is absolutely key, and what makes us tick.”

Cartwright actuary, Keir O’Donnell, commented: “We have worked hard with the trustees on their funding and investment strategies, as well as making sure the scheme’s data and benefits were ‘transaction ready’, so it is gratifying that such an attractive transaction came together so quickly, especially as it allowed the Scheme to smoothly deal with the original buy-in at the same time.”

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