The £12bn (€13.2bn) National Grid UK Pension Scheme has completed a buy-in transaction with Rothesay for approximately £800m.

The transaction, which follows a £2.8bn buy-in deal also with Rothesay in 2019, takes the total level of derisked liabilities with the pensions insurance specialist to £3.6bn.

Following 2019’s contract, Rothesay established a monitoring process for the pension scheme allowing it to execute a buy-in for this tranche of liabilities as soon as market pricing and scheme funding allowed, the insurer announced.

This particular buy-in policy is for Section A of the National Grid UK Pension Scheme and adds to the over 800,000 pensions Rothesay currently secures across the UK.

The contract provides the fund with more certainty around the impact of changes in life expectancies and removes financial risks, such as interest rate and inflation changes, with the aim of protecting the future funding of the scheme, it added.

Chris Hogg, the scheme’s CEO, said the deal would provide long-term security for the pensions of the scheme’s members.

He added: “ESG and climate change is of paramount importance to the trustee and is an important factor in our decision making process. We look forward to working with Rothesay who share our commitment to achieving net zero and supporting international agreements to limit future temperature increases to 1.5°C.”

Eddie Hodgart, group head of pensions at National Grid, said that reducing risk in its pension arrangements is a priority for National Grid.

Homestyle pension fund completes bulk annuity transaction

The Homestyle 2007 Pension Scheme has completed a £103m bulk purchase annuity transaction with Aviva, the insurer announced.

Aviva will insure the defined benefit pension liabilities of all of the scheme’s 1,294 members, removing the investment and longevity risk of these members from the scheme.

There will be no change to the amount of members’ benefits or the way in which they are paid, following the transaction.

The insurer selection process and terms negotiations were led by EY on behalf of Homestyle Pension Company Limited, the sponsoring employer of the scheme. BESTrustees is the fund’s independent trustee.

Isio advised on the deal, while legal services were provided by Squire Patton Boggs. Homestyle Pension Company Limited also received legal advice from Addleshaw Goddard.

Jamie Cole, head of bulk purchase annuity origination at Aviva, said: “All parties have worked well to deliver a smooth transaction, with close collaboration and pre-agreed terms helping deliver a positive outcome.”

Rachel Tranter, director at BESTrustees and chair of trustee for the scheme, said the transaction “materially improves the security for all members of the pension scheme”.

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