PA Consulting has completed a full buyout of its £850m scheme with Pension Insurance Corporation (PIC).
The full buyout - which covers the pension liabilities of approximately 2,400 members in the management consultancy's defined benefit (DB) scheme - was structured with a price lock based on the scheme's asset holdings and several non-standard benefits.
These included several member option exercises such as a pension increase exercise (PIE), accepted by 41% of the members, which helped to reduce inflation risk and made the scheme simpler to insure.
An enhanced transfer value (ETV) exercise was also run alongside the transaction, with PIC agreeing to take on the risk associated with the take-up rate - which provided the company with certainty over the buyout premium. The pricing of the ETV exercise was captured in the buyout pricing.
In addition, during the member option exercises, members were provided with access to free independent advice so they could make an informed decision.
PA Consulting were advised by Aon, who led the structuring and execution of the transaction, and PIC was advised by Herbert Smith Freehills.
Aon senior partner and the head of the member options team Ben Roe, said: "It's a first in the market and has proved to be a genuine win-win for all parties.
"Members have had the opportunity to take advice on an option which may not be available at this level again in the future. "
Partner and head of bulk annuities John Baines, added: "The ability to achieve this in a Solvency II environment is particularly pleasing, and following a relatively quiet year for large full scheme transactions in 2017, looks set to lead the way for many similar deals in a bumper 2018."
Aon said it expected this to be a record year for the bulk annuity market - with insurers expecting more than £20bn worth of buy-ins and buyouts in total.
Aviva Life & Pensions has concluded an £875m buy-in with its own staff pension scheme, following on from a similar transaction last year.
Just Group has completed a £74m pensioner buy-in with the UK pension scheme of a US-listed engineering business.
The Smiths Industries Pension Scheme has secured a £146m buy-in with Canada Life in its fourth bulk annuity and its sponsor’s tenth overall.
The Prudential Staff Pension Scheme has entered into a £3.7bn longevity swap with Pacific Life Re, insuring the longevity risk of over 20,000 pensioners.
The Baker Hughes (UK) Pension Plan has secured approximately £100m of liabilities through a buy-in with Just Group.