Merseyside Pension Fund completes £200m buy-in with Aviva

Written by Sophie Smith

18/09/2024

The Merseyside Pension Fund has completed a £200m buy-in with Aviva, securing the benefits of around 2,500 scheme members, attributable to Arriva Merseyside Ltd.

Mercer acted as the lead adviser with input from fund actuary, Paul Middleman, while legal advice was provided to the Administering Authority, Wirral Borough Council, by Eversheds Sutherland LLP.

Aviva was selected as the insurer given the council's strong emphasis on environmental, social, and governance (ESG) considerations, as Aviva was able to demonstrate its commitment in this area as part of the selection process, particularly given its role as a founding signatory to the Sustainability Principles Charter for bulk purchase annuities.

Wirral Borough Council director of pensions, Peter Wallach, confirmed that the Merseyside Pension Fund has now also become a charter signatory, and "look[s] forward to working collaboratively with Aviva, Mercer and other signatories, post-transaction".

“We are delighted to have expanded our risk management strategy to achieve greater certainty of cost for the fund’s biggest non-public sector constituent employer, Arriva Merseyside, whilst simultaneously improving governance and reducing risk across the employer base with Aviva," he continued.

“This was a complicated project, and we thank Mercer and Eversheds Sutherland for the clarity, expertise and tenacity they brought in assisting us through the process to ensure compliance with public procurement legislation, and to obtain competitive pricing along with good contractual terms."

Arriva Group group pensions manager, Ian Kirk, also highlighted the deal as "great news" for members of the Merseyside Pension Fund.

"Our number one priority across all of our pension schemes is to minimise risk and protect member benefits, and this transaction does just that," he said.

Adding to this, Aviva senior deal manager, John Fothergill, said: “We developed Aviva Clarity as a streamlined process to help a greater number of trustees by increasing standardisation.

"It’s pleasing that Aviva has now been recognised for tailoring its approach to adapt to the public sector procurement process.

"The Administering Authority made clear upfront the requirements to meet their ESG expectations and to be trusted to provide members’ benefits. This enabled us to efficiently deliver what they needed in order to proceed with Aviva.”

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