The trustees of the Aon Retirement Plan have concluded a buy-in with Pension Insurance Corporation (PIC) for around a third of the £3bn-4bn scheme.
The £900m transaction which was primarily funded with gilts covers the majority of pensioner liabilities across two of the five sections making up the segregated scheme.
PIC senior actuary Matt Barnes said this is the first sizeable transaction under Solvency II that came into force in January, requiring insurers to hold more capital against their bulk annuity businesses.
He said the Aon Retirement Plan deal shows "large buy-ins priced under Solvency II remain an attractive option for trustees."
Independent chair of trustees David Burton said: "We are very pleased to have been able to conclude this transaction at a time of considerable market volatility. By securing this buy-in asset we have taken a significant step in our long term de-risking plan, following a smaller transaction with another insurer last December."
Aon Hewitt acted as lead advisor to the trustees while CMS Cameron McKenna provided advice on the legal aspects.
Aon Hewitt's risk settlement group partner Paul Belok said: "One of the key priorities was to ensure that the transaction made sense economically, and this was achieved through a robust market review exercise, and negotiation of a price lock mechanism. Despite turbulent market conditions this gave a predictable outcome."
A spokesperson for Aon said a deal of this size was likely to be the first of many. In addition, the total bulk annuity market could reach £20bn over the next few years, compared to the £12.3bn of business written in 2015.
PIC had previously concluded two buy-in transactions with a separate Aon-sponsored pension scheme, the Aon Minet Pension Scheme, in 2014 and 2012 for around £210m and £100m.
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