The British Board of Agrément Pension and Life Assurance Scheme has completed a £20m full-scheme buyout with Aviva.
The scheme is sponsored by a construction product performance assessment, testing and certification firm, the British Board of Agrément Holdings Limited (BBA).
The deal secures the benefits of all 39 deferred and 82 pensioner members in the scheme, covering all scheme liabilities.
Over several years, the trustees have been working with their advisers to lay the foundations for an insurance transaction to ensure prompt completion and affordability for the BBA.
The scheme’s position was monitored until the contribution required from the sponsor to complete the deal fell below the amount previously set aside, which was reached following a period of positive investment performance.
Complex considerations were required in relation to an ongoing salary link for some members still working for the BBA, alongside the modelling of a non-standard pension increase.
The transaction was completed using Aviva’s Clarity service, while Broadstone’s SM&RT Insure approach secured the deal with ‘attractive’ terms.
Broadstone acted as lead deal adviser, adding to its existing appointment as actuary, administrator and investment consultant.
Open Trustees Limited was the scheme's independent trustee chair, acting alongside two member-nominated trustees, while Osborne Clarke acted as legal adviser to the trustees.
“The trustees are delighted to have reached this significant milestone,” said British Board of Agrément Pension and Life Assurance Scheme trustee chair, Jonathan Hazlett.
“Being able to secure members' benefits in full seemed a long way off a few years back.
"However, favourable market conditions, contributions from the BBA and careful forward planning to get ‘buyout ready’ have meant that we could enter into an insurance transaction very smoothly and much earlier than anticipated, notwithstanding the complications of an ongoing final salary link and some unusual pension increases.”
Aviva deal manager, Arpan Shah, commented: “We were very pleased to be selected by the trustees for this transaction.
“Our priority was to work collaboratively towards a successful outcome for all parties, and this was helped by excellent preparation by Broadstone.
“We look forward to working with the trustees and their advisers to conclude the data cleanse ensuring the highest standard of service for members after buyout.”
Broadstone deal lead and scheme actuary, Mark Channon, added: “I have been involved with this scheme for seven years, becoming scheme actuary at a time when funding was very tight and a buyout seemed a long way off.
“It has been extremely rewarding to work with a highly engaged set of trustees who have worked hard to get the scheme to this point.
“The teams at Broadstone, Open Trustees and Osborne Clarke have ensured the scheme was in excellent shape to approach the market which led to attractive terms from Aviva and, ultimately, a positive outcome for all members.”
