The Co-operative Pension Scheme has completed a £4bn buy-in with Rothesay securing benefits for nearly 50,000 members, covering defined benefit liabilities for 17,655 pensioners and dependants, along with 31,896 deferred members.
Employer contributions were non-mandated, utilising the surplus and illiquid assets of the Scheme. This completes the long-term de-risking process that began with three buy-ins with other insurers in 2020.
Aon served as the lead broker, with legal advice from Gowlings and Linklaters for Rothesay and the Scheme, respectively. Addleshaw Goddard provided legal advice to the Company, while Mercer acted as the scheme actuary and the Trustee’s investment adviser.
Rothesay collaborated with the Scheme and advisers for over 18 months to structure the transaction, completing over £5bn of pensions de-risking for the Scheme following 2022’s buy-in with the Bank Section.
Rothesay head of business development Sammy Cooper-Smith says: “It is really pleasing to reach such a successful outcome for the Scheme, its members and the sponsor. Having worked in partnership for 18 months we are proud to now offer security for a further 50,000 Co-op scheme members. Economic conditions continue to contribute to a very busy bulk annuity market, resulting in a number of exciting opportunities as more schemes than ever pursue insurance solutions.
“One of the impacts of scheme funding levels improving so quickly is the increased number of clients coming to market with a greater exposure to illiquid assets. Rothesay’s Illiquid Asset Transition team is purpose-built to support these schemes in their de-risking journey and was delighted to achieve this for the Co-op scheme members”.
IGG professional trustee and chair of trustees Chris Martin says: “We are delighted to have achieved this significant milestone in our de-risking journey, providing members with greater security. Through a collaborative approach and our advisers’ commitment to our objectives, plus Rothesay’s flexibility and partnership, we were able to navigate a significant period of volatility. I am pleased that by working together, we were able to achieve, an extremely successful outcome for our members. I would like in particular to thank my colleagues on the Trustee Board and within Co-op Group and our excellent advisers.”
Pensions for the Co-op people director Gary Dewin says: “The Co-op is supportive of the derisking action taken by the Trustee which we see as a positive outcome for scheme members. It also reduces our exposure to future funding risks associated with our defined benefit liabilities which, in turn, helps us strengthen our Co-op for the benefit of our members.”
Aon senior partner and head of risk settlement Martin Bird says: “In what has proven to be one of the busiest years on record for the bulk annuity market, we are extremely pleased to have supported the Trustee on this highly innovative transaction, helping to provide further security for members of the Section.”
Linklaters partner Phil Goss says: “Having worked with the Scheme for a number of years, it’s been very rewarding to support the Trustee throughout their de-risking journey to achieve this significant milestone for the Scheme and its members.”
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