Co-op Pension Scheme secures £4bn buy-in with Rothesay

Written by Sophie Smith

24/11/2023

The Co-operative Pension Scheme has secured a £4bn buy-in with Rothesay, securing the benefits for almost 50,000 members, including 17,655 pensioners and dependants, and 31,896 deferred members.

The buy-in marks the final step in fully securing member benefits as part of a long-term plan to de-risk the scheme, with a number of previous buy-ins completed with other insurers in 2020.

No contribution was required from the sponsoring employer as the scheme was in surplus, with illiquid assets, held in the scheme’s investment portfolio, were used to pay the premium.

Aon acted as the lead broker on the transaction was Aon, with Mercer acting as scheme actuary and the trustee’s investment adviser.

Rothesay and the scheme received legal advice from Gowlings and Linklaters, respectively, while the sponsoring employer received legal advice from Addleshaw Goddard.

Rothesay was working collaboratively with the scheme and its advisers for 18 months to structure the transaction, and has now completed over £5bn of pensions de-risking for the Co-operative Pension Scheme following 2022’s buy-in with the Bank Section.

Rothesay head of business development, Sammy Cooper-Smith, said: “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”.

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