Trustees of the Monsanto Pension Plan have agreed a £100m buy-in, protecting benefits for around 150 pensioners.
The deal with Scottish Widows is the first buy-in for the scheme, whose sponsoring employer is Pharmacia, a subsidiary of Pfizer. As part of the agreement, Monsanto will retain the risk of future deflation.
The trustees were advised by Willis Towers Watson, Aon Hewitt, and Slaughter and May, while Scottish Widows was advised by Pinsent Masons.
Monsanto trustee chairwoman Nita Tinn said the deal had benefitted from flexibility.
"This buy-in is the result of significant work by the trustee over the last six months," she said. "The Scottish Widows' team has offered an attractive deal and has been flexible and responsive to our needs, giving us greater control over which benefits we wish to secure as part of this buy-in.
"Willis Towers Watson negotiated a price tracking mechanism that directly linked to the assets we were intending to transfer in-specie to Scottish Widows, giving us certainty on the premium up to the point of transacting."
Scottish Widows director of bulk annuities Emma Watkins added the trustees had been "innovative" in structuring the deal.
"We are delighted that the trustee has chosen to insure members' benefits with us as part of their de-risking plan," she said. "The plan has been innovative in its approach to inflation protection, leading the way for other schemes to secure different benefits with insurers than those that they are obligated to pay to members."
Watkins added the insurer was already seeing strong demand from schemes for bulk annuities this year.
Willis Towers Watson specialist bulk annuity adviser Matt Wiberg said: "The features of this transaction demonstrate the flexibility of the bulk annuity market as it continues to evolve to meet pension funds' needs. We were pleased to help the trustee to purchase a buy-in having negotiated a highly attractive price which generated significant value for the plan."
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.