Kingfisher completes £900 million bulk annuity deal

Kingfisher, a retailing company that manages B&Q and Screwfix, has completed a £900 million bulk purchase annuity transaction for its pension scheme.

Aviva will insure the defined benefit pension liabilities for more than 8,000 members, taking responsibility for the investment and longevity risk. Members will see no change in the amount of their benefits or the way in which they are paid as a result of the transaction.

Clive Gilchrist of BESTrustees, chair of trustees for the Kingfisher Pension Scheme, commented that the transaction is “great” news for members.

“The trustee, with support from the Kingfisher pension executive team and our external advisers, has successfully completed a third buy-in and secured these existing pensioner members’ benefits through Aviva Life and Pensions UK,” he said.

Jamie Cole, head of bulk purchase annuity origination at Aviva, explained that he is “proud” to have helped the trustees of the pension scheme.

“Throughout the process we’ve been working to an ambitious timeline and thanks to the expertise and collaboration of all parties, we completed the transaction within three weeks of exclusivity,” he said.

The process to select an insurer and negotiate terms was led by Aon, while the trustee received actuarial advice from Hymans Robertson and legal advice from Eversheds Sutherland International. Aviva was advised by DLA Piper.

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John Baines, head of bulk annuities at Aon, added that this third and largest buy-in transaction in which Aon has worked with the Kingfisher trustee demonstrates the value of developing a clear strategy, with its tried-and-tested decision-making framework allowing the team to use their previous experience to benefit scheme members.

Baines explained that the first half of 2021 saw a “relatively modest” level of activity in the bulk annuity market, which gave rise to an opportunity for the trustee to move quickly to capture “excellent” market pricing.