The trustees of the Tullett Prebon Pension Scheme have agreed to insure all liabilities through a bulk annuity with Rothesay Life.
The deal - which covers all £270m liabilities across both pensioners and deferred members - includes the option to convert to a full buyout further down the line.
The sponsoring employer, Tullet Prebon ICAP, and the scheme's members are now protected against longevity, investment and other risks associated with long-term liabilities.
The scheme's trustee chairman Clive Gilchrist of BESTrustees said: "The trustees' first priority has been to ensure the future security of members' benefits. The scheme's strong funding position prompted consideration of a bulk annuity covering the scheme's liabilities.
After a comprehensive review of insurance providers, the trustees chose Rothesay Life because of product structure, price certainty and the long-term security from it being a low risk, regulated insurer.
"With pricing being better than early estimates, all parties worked to agree the final price and terms over a short time, resulting in a secure outcome for the members of the scheme," added Gilchrist.
Rothesay Life co-head of business development Guy Freeman said: "This transaction is a further illustration of the momentum that Rothesay Life has in the pensions de-risking market at a time when that market is showing strong signs of growth."
It is an interesting transaction given that bulk annuities that cover deferred members are relatively uncommon because it has historically been more expensive to insure these very long-term liabilities, while pensioner-only bulk annuities are very common.
Freeman said he sees a 10% difference in pricing between actual quotes and trustee estimates for long-duration bulk annuities in their actuarial valuations.
He also said the firm is seeing "increased appetite" from corporate sponsors in full de-risking.
The Tullett Prebon trustees were chaired by BESTrustees and advised by Aon Hewitt and Sackers, while the sponsoring employer was advised by Allen & Overy and Rothesay Life by Gowlings WLG.
Aon Hewitt risk settlement adviser Dominic Grimley, who advised the trustees, said the aim of the competitive tender process was to ensure the asset gains achieved by the scheme were quickly locked in.
"We achieved the objective of removing the risk while fully securing benefits at an attractive price. Rothesay Life provided the certainty required, by locking the price to assets already owned by the trustees and providing bespoke additional cover for data changes."
Sackers partner Stuart O'Brien, who provided legal advice to the trustees, said: "The innovative nature of the contract also covers-off a number of additional risks for the trustees and it includes some useful flexibilities which are beneficial to the trustees and the members."
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.
There have now been a total of 30 longevity swaps over £1bn publicly announced. The full list, provided by Willis Towers Watson and through PP research, is as follows...