RSA Group completes record £6.5bn buy-in with PIC

Written by Adam Cadle

27/02/2023

RSA Group has concluded the largest ever pension bulk annuity transaction with a £6.5bn buy-in for two of its pension schemes with Pension Insurance Corporation (PIC).

The deal covers a total of 40,000 members of the Sal Pension Scheme and the Royal Insurance Group Pension Scheme.

The pricing for the record deal was agreed amidst the market volatility during the liability-driven investment (LDI) crisis last year.

PIC’s in-house legal team, which worked on all legal aspects of the transaction, were advised by CMS Cameron McKenna.

LCP advised RSA and its parent company Intact on all aspects of the buy-in process, while Slaughter and May provided them with legal advice.

Aon and Sackers advised the trustees of the Sal Pension Scheme, and WTW and DLA Piper advised the trustees of the Royal Insurance Group Pension Scheme, throughout the transaction process.

Penfida provided covenant advice to both trustee boards.

PIC described the transaction as a “landmark deal” that addressed issues of timing and complexity. Its head of origination structuring Uzma Nazir added that the firm was proud to have completed an “extremely complex” bulk annuity deal.

“From pricing during the unprecedented volatility of the LDI crisis in the autumn of last year to structuring the buy-in to address the issue of asset suitability, this transaction overcame many of the hurdles that very large pension schemes face as they accelerate their de-risking plans in light of rising gilt yields,” Nazir said.

“The transaction could only have been completed with strong teamwork from the trustees, the sponsor, and their respective advisers, and I want to thank everyone involved for their constructive engagement which enabled this positive member outcome.”

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