The College of Law Pension & Assurance Scheme has completed a fourth pensioner buy-in, of £28m, with Aviva. The Scheme has previously completed two buy-ins with Aviva. The current transaction covered those pensioners who had retired since 2012, when the most recent previous buy-in was carried out. This means that almost all current pensioners are now covered by bulk annuities, reducing risk within the Scheme and contributing towards the Trustees’ long term aim of achieving a full scheme buy-out. Hymans Robertson was the lead adviser to the Trustees, with Linklaters providing advice on all legal aspects.

Through careful planning and setting clear expectations along the way, as with the previous buy-ins, this transaction was successfully completed within a few weeks from obtaining best and final quotations. The Trustees are also transferring the payroll for the pensioners covered by the buy-in to Aviva, to realise efficiencies in the administration of the Scheme.

The buy-in transaction was combined with a review of the Scheme’s investment strategy, which showed that it was possible to reduce the level of investment risk at the same time as carrying out the buy-in. By shifting some of their return seeking assets into the low risk portfolio, the Trustees have captured the benefits of the strong current funding level.

Commenting on the transaction, Alan Humphreys, Scheme Trustee said: 

“The Trustees are delighted to have completed their fourth pensioner buy-in, taking another important step to materially reduce risk for the members of the Scheme. Hymans Robertson used their significant experience to expertly guide us through this latest buy-in, enabling us to insure the balance of our current pensioner liabilities at a particularly attractive price. What was again especially reassuring was that the Hymans Robertson team kept the Trustees fully informed at each step and aware of and briefed on each of the steps in the transaction as they arose. ”

James Mullins, Partner and Head of Risk Transfer Solutions, said:

"We are delighted to have assisted the Trustees complete a fourth buy-in, building on our close working relationship with them. The strategy that the Trustees have adopted of insuring their pensioners in groups over time as they retire, and when they can afford to do so, has become increasingly recognised as the optimal way of working to insure all benefits. We expect to see more pension schemes adopt this approach in future, with an increasing number of schemes now targeting buy-out as their final destination.”

Nick Johnson, Managing Director of Aviva’s Bulk Purchase Annuity practice said:

“We worked closely with the trustees and their advisers so that we understood their specific requirements and could use Aviva’s expertise in this area to help them achieve great value. We look forward to continuing to build our relationship with the Trustees.”