Aviva announces £1 billion pension buy-in deal with Co-operative Pension Scheme

Aviva today announces it has completed a £1 billion bulk purchase annuity transaction with the Trustee of the Co-operative Pension Scheme (Pace).

Aviva will insure the defined benefit pension liabilities of approximately 7,000 members, removing the investment and longevity risk of these members from the Scheme. Members will see no change in the amount of their benefits or the way in which they are paid as a result of the transaction, which forms part of the Trustee’s de-risking strategy.

The competitive bidding process to select an insurer and negotiate terms was led by Aon on behalf of the Trustee. The Trustee received legal advice from Linklaters and investment advice from Mercer.

Angela Darlington, CEO Aviva UK Life*, said:

“I’m delighted that Aviva has secured this significant deal with the Co-operative Pension Scheme. This is further evidence of the expertise we have in pension de-risking and our ability to support schemes of all sizes. With an ‘umbrella’ framework now in place, we look forward to potential further de-risking opportunities in the future.

“As the UK's largest multi-line insurer, we’re in an exceptional position to offer our clients a whole range of insurance products, whether it’s for large or small schemes.”

Chris Martin of Independent Trustee Services Limited, the chair of the Co-operative Pension Scheme’s Trustee, said:

“This buy-in further increases member security as part of the Trustee’s long-term de-risking strategy, and is a real positive for scheme members, the Trustee and the Co-op. It represents a huge amount of hard work from the Co-op pensions team and thanks go to our advisers, Aon, Linklaters and Mercer, for their roles throughout the process and their advice to the Trustee.”

Gary Dewin, Director of Reward for the Co-op, said:

“Our Pace pension scheme is one of the strongest in the UK and highly valued by its members.  By taking this buy in approach we are simply looking to further strengthen this position.”

Tom Scott, Principal Consultant in Aon’s Risk Settlement Group, said:

"We are pleased to have supported the Joint Working Group in developing its de-risking strategy and navigating the exceptionally busy bulk annuity market over recent months.

“As a result of thorough preparation and careful timing, we have been able to secure terms with Aviva as part of the next stage in the Scheme's journey."  

Phil Goss, Linklaters Pensions Partner, said:

“The Trustee and Co-op have achieved a significant milestone in supporting the security of members’ benefits with the successful completion of this transaction. It has been a pleasure supporting the whole team throughout the project, from planning to execution, and working with Aviva and its advisers, to achieve terms that protect the long term interests of members.”

The Co-op is one of the world’s largest consumer co-ops, owned by millions of members. It has the UK’s fifth biggest food retailer, the UK’s number one funeral services provider, a major general insurance business, and a developing legal services business.

^{*Subject to regulatory approval}

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