Aviva has completed a £400 million bulk purchase annuity buy-in transaction with the trustees of the Deutsche Bank (UK) Pension Scheme.
Aviva will insure the defined benefit pension liabilities for nearly 1,300 members, removing the investment
and longevity risk of these members from the scheme.
Aviva said members would experience no change in the amount of benefits they receive or the way in which they are paid as a result of the deal.
The scheme trustees were independently advised throughout the process by Lane Clark & Peacock and CMS Cameron McKenna Nabarro Olswang who provided legal advice.
Jamie Cole, head of bulk purchase annuity origination at Aviva, said: “We are delighted to have completed this deal with Deutsche Bank, supporting them with the next tranche of their UK pension scheme de-risking strategy.
“We worked closely with all parties to create a bespoke arrangement for this transaction, one which will ensure we can fulfil future opportunities quickly and efficiently. This deal further demonstrates our appetite and ability to work with schemes of complexity and scale as they look to enter this market.”
Michael Wrobel, chair of the trustee Board, DB (UK) Pension Scheme, said: “We are very pleased to conclude this buy-in with Aviva. It is another significant step on our de-risking journey and the excellent outcome with Aviva reflects the expertise and collaborative approach of our advisers and our close working relationship with the bank.
Jeremy Sowden, head of pensions and benefits UKI, Deutsche Bank AG, added: “This latest transaction enables Deutsche Bank to hedge a material portion of the liabilities of scheme, with the majority of pensions currently in payment now insured. It is another step on our ongoing journey to reduce risk in relation to our defined benefit pension obligations, benefitting the scheme members, the trustee board and the bank.”
What is a bulk annuity pension buy in?
It is a form of insurance normally offered to final salary or defined benefit schemes, the insurance is against investment under performance and by buying the annuities in bulk the company running the scheme guarantees a pension income for the scheme members.
Tailored buy-in solutions are designed to help trustees and sponsoring employers to provide long-term security for scheme members.
A buy-in helps protect your pension plan from investment, inflation and longevity risks. The insurer who buys the scheme regular payments into the plan to help meet monthly pensioner payroll requirements.