The trustee of an unnamed pension scheme has agreed a £136.3m buy-in deal with Just Group, resolving the scheme’s liquidity issues.

The buy-in transaction covers the remaining 586 deferred members and 242 pensioner members, following a previous full pensioner buy-in with Legal and General in 2012, brokered by Buck, a Gallagher company.

Buck also acted as broker for the latest transaction, as well as being scheme actuary, administrator, and investment adviser to the trustees, while legal advice was provided by Reed Smith.

While the scheme’s assets were in excess of the total premium, a proportion of them were being held in illiquid investments, and therefore couldn’t be realised in time to meet the premium in full.

Given this, Buck negotiated for two elements of deferred premium, in order to allow the scheme time to realise the proceeds from its illiquid asset holdings, with £22m to be deferred for two years and £4.5m for three months.

This is expected to enable the trustees and the sponsor time to finalise a temporary loan to help manage the scheme’s short-term liquidity requirements.

The trustees also made use of Just Group's streamlined bulk quotation service to help meet its target of completing before the 2023 year-end, working exclusively with Just Group on the transaction.

Commenting on the deal, the trustee chair stated: “Recent market movements have resulted in us meeting our longer-term funding objectives for the scheme significantly sooner than anticipated, and Buck has done an outstanding job in preparing the trustees for this transaction in very short order, as well as developing a pragmatic solution for managing the scheme’s illiquid assets and ensuring that these did not become a stumbling block.

“I would also like to thank Reed Smith for the significant role they played in the legal aspects of this process, and for the flexibility demonstrated by Just in accommodating all of our requirements at such a busy time of year.”

Adding to this head of risk transfer at Buck, Mark van den Berghen, said: “This is an extra special transaction for me as I have been involved in the scheme for over 15 years.

“The outcome is a fantastic one for the members and hats off to all involved in not allowing the remaining illiquidity in the scheme to derail the transaction – all due to open communication, innovative consulting, and flexibility on both sides.”

Strategic business development manager at Just Group, Jon Appleby, added: “There is a busy, vibrant bulk annuity market for schemes of all sizes, so we benefited from the trustees and advisers engaging early and displaying terrific collaboration and forward planning.

“In addition, the use of Just Group’s innovative bulk quotation solution was pivotal in allowing us to meet the sponsor’s year-end completion objective. We are delighted to have worked with Buck and the trustees to secure the benefits for all members.”

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