Smiths Group pension scheme secures £146.5m buy-in with Canada Life

The Smiths Industries Pension Scheme has secured a £146.5m buy-in agreement with Canada Life, insuring the benefits of around 1,000 pensioners.

The transaction took advantage of strong pricing amid a “turbulent year” after the auction process was redesigned to accommodate post-Covid market conditions.

The trustees and sponsor were advised throughout by Aon, using its Compass bulk annuity platform, with Redington also advising on the investment aspects of the transaction.

The annuity is expected to further improve the security of members’ benefits, with the Smiths Group highlighting the transaction as demonstration of further progress in the de-risking of its pension liabilities.

Commenting on the transaction, Smiths Industries Pension Scheme chair of the trustee, Nicholas Godden, stated: "This is another well-timed step in our de-risking strategy, adding further to member protection despite a challenging market environment.

“Thanks to our advisers and to the group's continued support, the scheme is well positioned for the steps to come."

The transaction represents the fourth bulk annuity deal for the £3bn scheme, and follows the recent £142m buy-in for Smiths Group’s other major UK scheme, the TI Group Pension Scheme.

In total, approximately 71 per cent of all pensioner liabilities across the group’s two UK schemes have now been de-risked through 10 bulk annuities advised by Aon.

Commenting on the deal, Aon risk settlement adviser, Dominic Grimley, added: "Through extra planning, this transaction was designed to fit the circumstances we face in lockdown.

“This meant the focus was firmly on straightforward execution and price capture, while opportune timing also enabled a gain to be made against the scheme's funding target."

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