Biggest buy-in of 2015 with Civil Aviation Authority Pension Scheme
Rothesay Life, a leading life insurer specialising in providing de-risking solutions to UK defined benefit pension schemes, is pleased to announce that it has completed a £1.6 billion bulk annuity with the Civil Aviation Authority Pension Scheme (the “Scheme”).
The transaction, which insures a proportion of the Scheme’s liabilities with Rothesay Life, is the largest de-risking transaction completed so far in 2015 and is the second largest buy-in ever secured by a pension scheme in the UK. Rothesay Life has now written £3.4bn of new business year-to-date in 2015.
The Trustees were advised by Aon Hewitt and Reed Smith. Rothesay Life were advised by Wragge Lawrence Graham and Co.
Commenting on the transaction Rothesay Life’s Managing Director, Tom Pearce, said: “We are delighted to have completed such a significant transaction with the CAAPS and Aon. The deal is further evidence of the increasing maturity of the bulk annuity market and an endorsement of Rothesay Life as a leading player in it. Our strong capital position and cautious approach to risk management leaves us well positioned to take advantage of growth opportunities.”
Joanna Matthews, Independent Chair of the Civil Aviation Authority Pension Scheme, said: “The Trustee is delighted to have been able to achieve a significant reduction in the level of risk for the Scheme and its members as a result of this transaction, which has been carried out in consultation with the CAA. The staff of CAAPS, our advisers and Rothesay Life have collaborated very professionally and in a highly efficient manner to achieve this excellent outcome for the Scheme. The transaction went extremely smoothly thanks to the very high quality of our data and processes.”
Paul Belok, partner in Aon Hewitt's Risk Settlement Group, said: “We carried out a full market review on behalf of the Trustee, including due diligence advice on financial strength and administrative capabilities, which resulted in the selection of Rothesay Life as the preferred provider. We were also able to agree with Rothesay a mechanism which meant that the Trustee clearly understood how the premium would move whilst final details including legal documentation were being addressed, with these movements being closely mirrored by the value of relevant Scheme assets. This transaction is further evidence of Aon Hewitt's leading position in the risk settlement market.”
Simon Hartley, partner in Reed Smith’s London pensions group, said: “We are delighted to have assisted our long standing client, the Trustee of the Civil Aviation Authority Pension Scheme, in achieving this excellent result which benefits everyone involved with the Scheme.”
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Notes to editors
About Rothesay Life
Rothesay Life was established in 2007 and has become one of the leading providers of regulated insurance solutions in the UK market for pensions de-risking, making payments of around £700m a year from over £18 billion of insurance contracts. In 2014, Rothesay Life received around £1.7 billion of bulk annuity premiums (2013: £1.6bn) and wrote seven deals over £100m, more than any other insurer in the sector. This strong growth has been achieved through the steady accumulation of pension scheme clients and significant strategic acquisitions.
Existing Rothesay Life clients include the pension schemes and members associated with such names as RSA, British Airways, Lehman Brothers, Rank, Uniq, General Motors, the MNOPF (Merchant Navy Officers Pension Fund), InterContinental Hotels, Philips and GKN.
Rothesay Life is a secure long-term provider of pensions, focused on
- a flexible and committed approach to execution;
- ongoing risk management to maintain balance sheet strength; and
- robust operational processes.
Rothesay Life is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
About The Civil Aviation Authority Pension Scheme
The Civil Aviation Authority Pension Scheme (CAAPS) is an occupational pension scheme providing defined benefits to the employees of NATS Limited (NATS) and the Civil Aviation Authority (CAA). The Scheme has assets of £7.25 billion and provides benefits to over 14,000 members. The Scheme is governed by a corporate Trustee, CAAPS Trustee Limited.
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About Reed Smith
Reed Smith is a global law firm with 1800 lawyers in 26 offices across Europe, the Middle East, Asia and the United States. In London, Reed Smith’s pensions group advises the trustees and sponsoring employers of some of the largest UK pension schemes.