National Grid’s Electricity Supply Pension Scheme (ESPS) has completed a £1.7bn (€2bn) buy-in with Aviva.
The transaction, which was completed last month, included transitioning the group’s existing longevity swap with Zurich to Aviva, and insures the benefits for 5,800 pensioner members of the group.
The scheme completed a longevity swap with Zurich in May 2018 to cover more than £2bn of liabilities linked to around 6,000 pensioners.
Aon acted as the sole transaction adviser, covering actuarial, investment and broking aspects. Legal advice to the group trustee was provided by DLA Piper UK. The scheme trustee was advised by Mayer Brown International.
Stephen Yandle, chair of the group trustee board, said: “The group trustee is pleased to have been able to take the next important step on our de-risking journey. The transaction is great news for members in the group, adding further protection to their benefits, and on terms that are fully aligned with our strategic objectives.”
Sean Rooney, senior deal manager at Aviva, said the insurer has worked “closely” with the trustees and their advisers to support them with this “important step” to provide long-term security for their pensioner members.
Rooney added the transaction included the transition of the group’s longevity swap, and throughout the process all parties have been flexible and focused on delivering a successful outcome.
Tom Scott, partner at Aon, added that entering into a longevity swap in 2018 allowed the group to hedge longevity risk until it was in a position to move to buy-in.
He said: “Having flexibility, via a future-proofed longevity swap contract with Zurich to transition to another insurer, enabled us to achieve an excellent outcome for the group and its members.”
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