Church of England Pensions Board completes £145m buy-in with Aviva

The Church of England Pensions Board (CEPB) has completed a £145m buy-in with Aviva for the Church Workers Pension Fund.

The transaction follows on from previous buy-in deals with Prudential in 2013 and Aviva in 2022, meaning that all pensions within the fund’s defined benefit (DB) scheme are now backed by insurance policies.

As part of the transaction, CEPB has paid a £145m premium to Aviva, in return for an income stream that will exactly match pensions that need to be paid to current retired members and future retiring members.

This third and final buy-in step removes the exposure to investment and longevity risk, which materially reduces the risk of a future funding deficit.

Aviva was selected on the back of extensive due diligence by the board and following the release of the Charter for Sustainability in Bulk Annuities.

The charter – co-created by CEPB – provides a means to translate pension schemes’ sustainability goals into these types of buy-in insurance contracts, and to determine whether an insurer meets the required levels of commitment to sustainability.

The board acted in its capacity as the trustee of the Church Workers Pension Fund for this transaction. It was advised by LCP, with Linklaters providing legal advice, Mercer providing investment advice, and Cardano providing covenant advice.

Clive Mather, CEPB’s chair, said the transaction was a “great result” for scheme members and Church employers.

He said: “It is a prudent step which has been made possible by a long run of strong investment returns, cost savings, and collaborative working with employers. Reaching this point is a key milestone for this scheme, opening up possibilities for the future.”

Toby Holmes, senior deal manager at Aviva, said: “We’re pleased that the trustee of the Church Workers Pension Fund has again selected Aviva to secure the benefits for the remaining members of the scheme.”

He added that this had been a “very smooth” process run by a well-prepared and well-advised scheme.

“The trustees put ESG and responsible investing at the heart of their decision making and we’re proud to have been able to demonstrate our commitment in this area,” he said.

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