Rothesay Life completes £185m bulk annuity with Makro
13th November 2014
Rothesay Life, one of the leading life insurers specialising in providing de-risking solutions to UK defined benefit pension schemes, is pleased to announce that it has completed a £185 million bulk annuity with the Makro Staff Pension Scheme (the “Scheme”), a pension Scheme for the former employees of Makro UK.
The Scheme started its de-risking journey in December 2011, following closure to future accrual, with a bulk annuity being the ultimate goal of the subsequent long-term investment strategy.
- The policy will be held by the Trustee as an asset of the Scheme, with income paid to the Scheme
- Members’ benefits are protected against longevity, investment and other risks associated with long-term pension provision
- Administration and payment of members’ benefits are unaffected by this transaction
LCP were appointed as specialist advisers to lead the execution of the bulk annuity whilstworking with the Trustee’s incumbent advisers. Pinsent Masons provided legal advice and Towers Watson acted as Scheme Actuary to the Trustee. Linklaters provided legal advice to Rothesay Life.
Rothesay Life Head of Business Development, Guy Freeman, said: “It has taken a lot of hard work from the Trustees, the company and their advisers to reach a position where we are able to secure the Scheme’s benefits in this way. We were particularly impressed by the company’s commitment to achieving this result and its decisive action to capitalise on current economic conditions. We look forward to continuing to work with the Scheme and its advisers.”
Emma Watkins, Partner at LCP and lead adviser, said: “There are a number of additional complexities in securing benefits for both deferred members and pensioners. Successful completion of this transaction just over 3 months after approaching the market demonstrates the preparation and determination on the part of the Trustee and the company to get to this position. It also shows how well-prepared trustees and sponsors who respond quickly when opportunities arise can take advantage of favourable market conditions and competitive pricing.”
Rothesay Life CEO, Addy Loudiadis, added: “It takes significant skill and resource to execute these types of transactions. Our pipeline is as good as it has ever been; this is a reflection of schemes’ improved funding positions, corporate demand for full de-risking remaining strong and our position in the market.”
For further information please contact:
Temple Bar Advisory Limited +44 (0)20 7002 1080 or +44 (0)7795 425580
Alex Child-Villiers or William Barker
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, with over £15 billion of insurance contracts. In 2013, Rothesay Life wrote £1.6 billion of new bulk annuity business following the £1.3 billion written in 2012. This strong growth has been achieved through the steady accumulation of pension scheme clients.
Existing Rothesay Life clients include the pension schemes and members associated with such names as RSA, British Airways, 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.
LCP is a firm of financial, actuarial and business consultants, specialising in the areas of pensions, investment, insurance and business analytics.
LCP has led the way in helping pension schemes to de-risk using buy-ins and buy-outs. Sofar in 2014, LCP has acted as lead adviser on 10 transactions over £100m, including to the ICI Pension Fund on its buy-in transactions (£3bn and £600m), to the Church Workers Pension Fund on its £100 million buy-in, to the Total UK Pension Fund on its £1.6bn buy-in, to Philips on its £300m buy-in and to the largest medically underwritten transaction written to date (£36.5m) for a shipping firm.
Bulk annuity – An insurance policy through which a pension scheme can secure the retirement income payable to a group of people in exchange for paying a premium to the insurer. In taking out the insurance policy, the pension scheme is purchasing protection against all risks associated with paying defined benefit pensions including longevity, inflation and investment performance risks.
© Copyright Rothesay Life. All rights reserved.