Canada Life has agreed a £280m buy-in with the Bayer Group Pension Plan, the pension scheme for the pharmaceuticals giant, insuring the benefits of more than 1,300 retirees.

The buy-in covers around 40% of the plan’s pensions in payment, reducing the plans exposure to investment and longevity risk.

The transaction was steered by a collaboration of representatives from the plan’s trustee, chaired by Chris Martin of Independent Governance Group (IGG), the sponsoring employer, Bayer Plc, and the parent company, Bayer AG.

An umbrella contract has been established as part of the transaction, enabling the trustee to potentially insure further liabilities efficiently and when further opportunities arise.

The transaction was led by LCP on behalf of the trustee, while legal advice was provided to the trustee by CMS. Eversheds Sutherland provided legal advice to Canada Life and Isio provided advice to Bayer Plc.

Martin said that the transaction represents a “significant milestone” in the plan’s journey, made possible due to the excellent constructive collaboration between the trustee, company and respective advisory teams.

Tim Coulson, managing director of bulk purchase annuities at Canada Life, added: “With de-risking solutions now a realistic option for many more pension schemes, we are delighted to be able to help the trustee to further secure the future of members’ benefits.”

He said that urther opportunities are available to the scheme when conditions allow under this transaction.

He added that this has been delivered on “favourable commercial terms” during a period of intense market activity and is the result of all parties involved working together to deliver the best possible outcome for both the scheme trustee and members.

This was echoed by Rachel Hirst, partner at LCP, who said: “This transaction demonstrates that, despite the market being exceptionally busy, effective collaboration and thorough preparation still allows schemes to access strong insurer engagement and attractive opportunities.”

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