Aviation services firm Menzies has completed a £260 million pensions buy-in for its Menzies Pension Fund.
The transaction secures the benefits of more than 3,000 members, including almost 1,400 pensioners and 1,650 deferred members.
The process included a secondary market sale of an illiquid asset and deferral of premium, which enabled the buy-in shortfall to be met by a continuation of the existing schedule of contributions.
Law firm LCP was the lead pension risk transfer adviser. Legal advice was provided to the trustee by Brodies Solicitors and to Just Group by its internal legal team and Gowling WLG.
The firm completed a previous pensioner-only buy-in in 2018.
Bob Hymas, trustee to the scheme, said: “This was a collaborative process to achieve a positive solution tailored to the scheme. Just Group worked closely and flexibly with all advisers to determine a suitable price lock for the scheme’s circumstances alongside a premium deferral structure that dovetailed with the scheme’s funding plan.”
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Kishan Radia, DB business development manager at Just Group, added: “This deal is an example of how effective communication and teamwork enabled Just Group to deliver a bespoke solution for a well-prepared scheme to secure member benefits. Working closely with the trustee and advisers, we developed an appropriate price lock and premium deferral structure that worked for all parties. This transaction is further evidence of a vibrant bulk annuity market that’s working for schemes of all sizes.”
Ruth Ward, principal at LCP, said: “We are pleased to have advised the joint working group on this transaction, which provides additional security for members’ benefits in a carefully designed transaction that locks in a favourable position for the trustee and sponsor. This transaction shows it is possible to build a strategy balancing the options available for a scheme across the insurance and secondary market for illiquid assets to give the trustee a clear route to reaching their objective.”