UK retailer Co-op has insured the final tranche of its pension scheme liabilities in a £4bn ($5bn) deal with insurer Rothesay.
The deal involves transferring almost 50,000 scheme members, made up of 17,655 pensioners and dependents and 31,896 deferred members and is the fourth deal between the two parties following three buy-in transactions in 2020.
The pension scheme’s sponsor is the Co-operative Group and, in a press release, Rothesay said that no additional contribution from the employer was required as the fund was in surplus and illiquid assets in its investment portfolio were used to pay the buy-in premium.
The Co-op pension fund is a section of the larger Cooperative Pension Scheme. Rothesay said this latest deal brings the total value of transactions between the two entities to £5bn, following a 2022 deal with the pension fund’s Bank section.
Aon was the lead broker on the deal. Gowlings provided legal advice to Rothesay, while Linklaters advised the pension fund. Mercer was the scheme actuary and investment advisor to the trustees.
The UK insures has completed a number of buy-in deals so far in 2023, including a $560m transaction with ferry operator P&O, a $330m buy-in with the Smith & Nephew UK pension fund and a $1.75bn deal with supermarket group Safeway.
