Aviva Life & Pensions has concluded an £875m buy-in with its own staff pension scheme, following on from a similar transaction last year.
The bulk annuity purchase insures the benefits of 2,868 members of the Aviva Staff Pension Scheme, removing investment and longevity risk of these members from the scheme. Roughly two thirds of the benefits insured relate to deferred members, while the other third is for pensioner members.
In addition to the £1.7bn buy-in last year, covering 5,800 deferred and pensioner members, the scheme purchased in 2014 a £5bn longevity swap, which covers 19,000 members.
The deal takes Aviva's total buy-in and buyout volumes for 2020 to just under £5.9bn, a record annual total for the insurer. Total announced market volumes across all eight participating insurers amount to around £20.8bn.
Trustee chairman Brian Bussell commented: "The trustee is delighted to have entered into this second buy-in with Aviva to continue to take steps to help secure the benefits due to our members. In addition to the existing longevity swap and buy-in, this recent buy-in helps to further reduce the amount of longevity and investment risk within the scheme."
Aviva head of bulk purchase annuity origination Jamie Cole added: "This latest transaction with the Aviva Staff Pension Scheme further underlines our capabilities and expertise in the de-risking market. It has been a year of uncertainty for many, but we've consistently helped schemes to secure member benefits throughout and we're pleased now to support the Aviva Staff Pension Scheme with the next stage of its de-risking strategy.
"We remain focused on the disciplined growth of our business and this transaction builds on the record £5bn of new bulk annuity business reported in our third quarter operating update [yesterday]."
The scheme was advised by Linklaters and Hymans Robertson, whose partner Michael Abramson commented: "Hymans Robertson is pleased to have helped the trustee take another meaningful step in its de-risking journey. In a turbulent year, this buy-in is a prime example of how pension schemes who are well prepared can move nimbly to take advantage of de-risking opportunities."
