Hitachi scheme agrees hybrid benefit buy-in with L&G
The Hitachi Data Systems Retirement Benefits Plan has agreed a buy-in with Legal & General (L&G) Assurance Society, covering both defined benefit (DB) and defined contribution (DC) provision.
The bulk annuity insures benefits for the 120 pensioner and deferred members who were not included in two prior buy-ins in 2012 and 2013, also completed with L&G.
The deal was completed in the first half of this year, but its value was not disclosed.
The "unusual" benefit structure means members will receive annuities based on the higher of their earnings-related DB pension and their DC account during their active service period, until the plan is wound up or bought out.
The solution was agreed ahead of the transaction, allowing deferred members time to consider their options ahead of a bulk crystallisation event at buyout.
Sefton Park Trustee Company acts as a trustee of the plan, with chairman Neville Byford noting: "We are pleased to have taken this latest important step in our de-risking journey. All parties worked together to find a solution which meets the objectives of the trustees and plan sponsor while protecting the security of members' benefits."
L&G pension risk transfer director Frankie Borrell added: "We are delighted to have helped Hitachi and their trustee over the past seven years. This is another great example of a group of trustees and their sponsor having the confidence and trust to start and finish their de-risking journey with us.
"The dual-benefit dynamic presented some interesting challenges for the transaction, but all parties showed great focus on delivering an outcome that had members' interests at the heart."
Willis Towers Watson provided actuarial and consulting advice to the scheme, while Gunnercooke provided legal advice. CMS also provided legal advice to L&G.
Willis Towers Watson transaction specialist Katherine Gilder said the deal "was executed in short timescales, highlighting the contractual efficiencies that can be achieved from multiple transactions with the same insurer".
Around £19.1bn of liabilities have so far been insured through buy-ins and buyouts this year, with the first half breaking records for total volumes, while an additional £7bn of longevity risk was hedged.
More on Risk Reduction
ESPS completes £805m buy-in with Scottish Widows
The Electricity North West Group of the Electricity Supply Pension Scheme (ESPS) has invested in an £805m pensioner buy-in with Scottish Widows.
Zurich insures £800m of FTSE 100 scheme longevity risk
Zurich has agreed to insure £800m of longevity risk for the pensioners of a FTSE 100-sponsored pension scheme.
Rothesay Life agrees £255m full buy-in with ESAB scheme
The ESAB Group (UK) Limited Pension & Life Assurance Scheme has purchased a £255m full buy-in with Rothesay Life, covering benefits for all 900 members of the scheme.
Bulk annuity market to 'top £0.5trn in 2020s'
The value of UK bulk annuity deals is set to quadruple in the 2020s when compared to this decade, Mercer has predicted.
Enabling the endgame: Why IRM has been crucial to bumper bulk annuity deals
Greater regulatory focus on covenant, holistic risk management, and long-term targets has helped proactive schemes approach their endgames earlier, says Adolfo Aponte.
