Standard Life agrees £1.7bn buy-in for Gallaher Pensions

Deal also provides inflation protection for all 7,600 members of the scheme

James Phillips
clock • 1 min read
Standard Life managing director of DB solutions Justin Grainger
Image:

Standard Life managing director of DB solutions Justin Grainger

The Gallaher Defined Benefit Pension (DB) Scheme has completed a £1.7bn full scheme buy-in with Standard Life following a competitive tender exercise.

All 7,600 members of the scheme were insured in the deal, which was agreed in December, with the right to additional pension increases in the event of future high inflation.

The agreement was made as inflation continues to soar to 30-year highs in the UK, with the Office for National Statistics yesterday confirming a figure of 5.4% in the 12 months to December 2021.

It is the first bulk annuity for the scheme, but no details were released on whether the scheme would now transition to buyout.

Trustee chair Robert Thomas, who is also trustee director at Law Debenture, commented: "I'm delighted by the completion of this project to secure members' benefits with Standard Life.

"The additional inflation provisions provide great long-term income protection for members in their retirement, which I am sure they will particularly value at this time of rising inflation."

Standard Life, part of the Phoenix Group umbrella company, completed around £5.5bn of bulk annuities in 2021, including a £1.8bn buy-in with Imperial Tobacco announced last week.

Standard Life managing director of DB solutions Justin Grainger said: "This transaction demonstrates the ongoing commitment of Standard Life to the bulk annuity market, and our ability to provide varied and flexible solutions to all sizes and types of schemes. We are pleased to welcome the schemes' members to Standard Life."

In agreeing the transaction, the scheme was advised by Aon and Hogan Lovells, while DLA Piper advised Standard Life.

Aon partner John Baines added: "Securing all benefits in a single transaction with significant benefits for all stakeholders of the scheme has been a monumental achievement. By preparing thoroughly in advance, including asset de-risking over a number of years and a carefully structured transaction process, the trustee benefited from a fiercely competitive auction process."

James Phillips
Author spotlight

James Phillips

Professional Pensions journalist from 2016-2022

More on Risk Reduction

Haberdashers scheme sews up £3m buy-in deal with Just Group

Haberdashers scheme sews up £3m buy-in deal with Just Group

Bulk annuity transaction secures the benefits for scheme whose sponsor was founded in 1448

Martin Richmond
clock 12 July 2024 • 2 min read
De-risking funded reinsurance arrangements in the UK life insurance sector

De-risking funded reinsurance arrangements in the UK life insurance sector

Francis Richard Pereira assesses how changes to regulation will impact the PRT market

Francis Richard Pereira
clock 10 July 2024 • 7 min read
Institute of Civil Engineers scheme agrees £35m buy-in with Aviva

Institute of Civil Engineers scheme agrees £35m buy-in with Aviva

Deal insures the benefits of around 300 pension scheme members

Jasmine Urquhart
clock 10 July 2024 • 2 min read
Trustpilot