The Co-operative Pension Scheme has secured a £4bn buy-in with Rothesay, securing the benefits for almost 50,000 members, including 17,655 pensioners and dependants, and 31,896 deferred members.

The buy-in marks the final step in fully securing member benefits as part of a long-term plan to de-risk the scheme, with a number of previous buy-ins completed with other insurers in 2020.

No contribution was required from the sponsoring employer as the scheme was in surplus, with illiquid assets, held in the scheme’s investment portfolio, were used to pay the premium.

Aon acted as the lead broker on the transaction was Aon, with Mercer acting as scheme actuary and the trustee’s investment adviser.

Rothesay and the scheme received legal advice from Gowlings and Linklaters, respectively, while the sponsoring employer received legal advice from Addleshaw Goddard.

Rothesay was working collaboratively with the scheme and its advisers for 18 months to structure the transaction, and has now completed over £5bn of pensions de-risking for the Co-operative Pension Scheme following 2022’s buy-in with the Bank Section.

Chair of trustees, Chris Martin, highlighted the deal as a "significant milestone" in the scheme’s de-risking journey, also providing members with greater security.

Martin said: "Through a collaborative approach and our advisers’ commitment to our objectives, plus Rothesay’s flexibility and partnership, we were able to navigate a significant
period of volatility.

"I am pleased that by working together, we were able to achieve, an extremely successful outcome for our members. I would like in particular to thank my colleagues on the Trustee Board and within Co-op Group and our excellent advisers."

Co-op pensions people director, Gary Dewin, added: "The Co-op is supportive of the de-risking action taken by the trustee which we see as a positive outcome for scheme members. It also reduces our exposure to future funding risks associated with our defined benefit liabilities which, in turn, helps us strengthen our Co-op for the benefit of our members.”

Rothesay head of business development, Sammy Cooper-Smith, added: "It is really pleasing to reach such a successful outcome for the scheme, its members and the sponsor. Having worked in partnership for 18 months we are proud to now offer security for a further 50,000 Co-op scheme members.

"Economic conditions continue to contribute to a very busy bulk annuity market, resulting in a number of exciting opportunities as more schemes than ever pursue insurance solutions.

"One of the impacts of scheme funding levels improving so quickly is the increased number of clients coming to market with a greater exposure to illiquid assets. Rothesay’s Illiquid Asset Transition team is purpose-built to support these schemes in their de-risking journey and was delighted to achieve this for the Co-op scheme members."

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