Northern Bank Pension Scheme has completed a £286m bulk purchase annuity (BPA) transaction, securing benefits of its remaining 1,917 members. The buy-in was completed in partnership with M&G, with Prudential Assurance Company (PAC) as insuring entity.
This is the second transaction with PAC for Northern Bank Pension scheme, following a previous pensioner-only £680m buy-in completed in 2015, which saw benefits of 2,000 members insured.
Last year, Northern Bank Pension Scheme completed two buy-in transactions with Aviva Life, first for £277m and a second for £30m, which saw Aviva insure the defined benefit (DB) pension liabilities of 800 members in total.
M&G said this transaction is a final step to insuring the scheme’s membership in full and also involved the successful transfer of an illiquid asset from the pension scheme.
The trustee was advised on the transaction by WTW as risk settlement adviser, Hymans Robertson as investment consultant, WTW as scheme actuary and scheme secretary, while Sackers and Burges Salmon were legal advisers.
Meanwhile CMS provided legal advice to Northern Bank and Hogan Lovells provided legal advice to M&G.
Nick Chadha, partner at PAN Trustees and chair of trustee for Northern Bank Pension Scheme, said: “The trustee is pleased to have partnered with M&G again to enhance the security of members’ benefits and mitigate most of the risks facing the scheme.”
He said it was a great achievement to complete a full buy-in several years ahead of expectations, “demonstrating the importance of trustees having a good understanding of the de-risking markets and being agile in their approach”.
Shelly Beard, managing director at WTW, said the transaction was “complex” and that all parties collaborated to find a solution, which included “unusual benefit features and the transfer of an illiquid asset”.
Andrea Rossi, chief executive officer at M&G, added that the transaction demonstrates M&G’s ability to “find flexible and innovative solutions for our clients”.
Rossi added: “It also represents an important step in the delivery of our strategic objectives by leveraging our differentiated business model to drive sustainable growth.”
The transaction follows news from last week that M&G had returned to the UK’s BPA market by concluding a £331m buy-in transaction for one of its own pension funds – M&G Group Pension Scheme.