The NSK Pension Scheme and the Menzies Pension Fund have completed bulk purchase annuity deals with M&G and Just Group, respectively, for a total of £569m (€672m).
NSK Pension Scheme’s deal, for £309m, is the third buy-in by M&G since the insurer re-entered the bulk annuity market in September, with a total new business written now of about £930m.
The buy-in insures the pensions of around 3,700 pensioner and deferred members of manufacturer NSK’s UK pension scheme.
The Menzies Pension Fund buy-in was for £260m. The transaction was described as “complex”, including “dovetailing the process with a secondary market sale of an illiquid asset and deferral of premium to enable the buy-in shortfall to be met by a continuation of the existing schedule of contributions”.
The transaction was completed in March 2024 and secures the benefits of over 3,000 members, including almost 1,400 pensioners and over 1,650 deferred members.
Kishan Radia, defined benefit (DB) business development manager at Just Group, said the Menzies deal was “further evidence of a vibrant bulk-annuity market that’s working for schemes of all sizes”.
Mercer acted as transaction lead adviser for NSK Europe, with legal advice to the sponsor provided by Shoosmiths. The trustees were advised by Aon and CMS. Hogan Lovells provided legal advice to M&G.
For the Menzies deal, LCP was lead pension risk transfer adviser and legal advice was provided to the trustee by Brodies LLP Solicitors and to Just Group by Gowling WLG, alongside Just Group’s internal legal team.
The vibrant bulk-annuity market in the UK stands in contrast to the situation in the Netherlands, where insurance firms are struggling to entice pension funds into agreeing on buyout transactions amid the country’s move to defined contribution (DC) pension arrangements.
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