The Co-operative’s Pace pension scheme has struck a £1bn (€1.2bn) pension insurance buy-in with the Pension Insurance Corporation (PIC), it was announced today.

The deal guarantees the pension benefits of around 7,000 members in the £9bn Co-op section of the scheme.

Its announcement comes a few weeks after that of a bulk annuity transaction for the same amount with Aviva, also insuring the defined benefit liabilities of around 7,000 members in the scheme.

Commenting on the PIC deal, 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. The purchase of Pace’s second significant insurance contract further protects members by strengthening the scheme’s position.”

The Co-op sponsors multiple pension schemes. Last year it offloaded liabilities associated with the pension scheme for the Somerfield supermarket chain in a £425m deal with PIC.

PIC today also announced it made its first investment in the Spanish solar energy sector, providing debt funding for 21 solar parks owned by Q-Energy in a £190m deal. 

Separately, yesterday Prudential Financial disclosed that its Prudential Insurance Company of America unit had closed two more longevity reinsurance transactions with UK insurer Rothesay Life, reinsuring a combined $6bn (€5.6bn) of pension liabilities associated with two bulk annuity transactions completed in the second half of last year.

2019 was a record year in the UK pension de-risking market. Transactions concluded by Rothesay included the largest full-scheme buy-out ever in the UK, a £4.7bn deal with Telent.

Amy Kessler, head of longevity risk transfer for Prudential Financial, said that this year, “smaller transactions will be a growth area to watch, as will the burgeoning risk transfer markets in Canada and the Netherlands”.

 

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