Just Retirement and Aliaxis have agreed a £36m medically-underwritten bulk annuity deal in a bid to reduce longevity risk exposure.
The agreement, which will cover benefits of 30 out of 340 pensioners of the Aliaxis UK defined benefit (DB) scheme, was managed by Willis Towers Watson, and advised by CMS Cameron McKenna.
Although the number of members' benefits protected appears small, the firm stated approximately half of pensioner liabilities related to these 30 members. The scheme has 855 members in total.
The deal also involved gathering individual medical data, which was conducted by MorganAsh.
Trustee board chairman Huw Davies said the deal provided the best outcome for members.
"With just under 50 pensioner members to consider, it was vital that this buy-in not only provided demonstrable value but was also achieved in a smooth and timely manner," he said.
"Ultimately we chose Just Retirement as their pre-transaction medical underwriting represented the best solution for the scheme."
Aliaxis Group group chief for human resources and communications officer Joerg Boder added it would help to stabilise the scheme's funding level.
"Aliaxis are very pleased with the outcome of this process," he said. "Just Retirement has delivered a solution that has resulted in a significant reduction in the volatility of the scheme's funding position, and ultimately the company's balance sheet, providing a great outcome for members and the company alike."
Willis Towers Watson specialist bulk annuity adviser Suzanna Vaughan added: "Prior to this transaction, the scheme's finances were subject to a considerable concentration of risk depending on the life expectancy of a small number of pensioners."
"The transaction was structured such that this risk was significantly reduced through insuring a proportion of the benefits payable to the highest income members. The pricing achieved in this transaction reflects an extremely attractive market currently."
Just Retirement director of DB solutions Tim Coulson said he expected deals like this to become more common.
"Working closely with Willis Towers Watson and the trustees, we were able to use pre-transaction medical underwriting to provide Aliaxis with a highly competitive quote which met their exact standards," he said.
"As momentum builds in the market, we expect to see more people exploring this approach and reaping the clear benefits."
Around £12.4bn of bulk annuity deals were carried out last year, and a recent LCP de-risking report estimates buy-in and buyout transactions could surpass £15bn in 2017.
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