Buck, a Gallagher company, completed a £136.3 million buy-in deal for an undisclosed Scheme, in partnership with Just Group, resolving the Scheme’s liquidity issues.
The deal includes 242 pensioner members and 586 deferred members.
The Scheme had more assets than liabilities, but some of those assets were invested in illiquid securities, making it difficult to pay the premium in full.
Buck arranged for deferred premiums of £4.5 million for three months and £22 million for two years, which would give the Scheme time to realise the proceeds from its illiquid assets. In order to manage the Scheme’s short-term liquidity needs, this agreement helps the Trustees and the Sponsor finalise a temporary loan.
In addition to serving as the Trustees’ investment adviser, administrator, and scheme actuary, Buck also served as the transaction’s broker. The Trustees used Just Group’s streamlined bulk quotation solution in order to help the Sponsor accomplish one of its main goals by the end of 2023.
Buck head of risk transfer Mark van den Berghen says: “This is an extra special transaction for me as I have been involved in the Scheme for over 15 years.
“The outcome is a fantastic one for the members and hats off to all involved in not allowing the remaining illiquidity in the Scheme to derail the transaction – all due to open communication, innovative consulting, and flexibility on both sides.”
The Chair of Trustees says: “Recent market movements have resulted in us meeting our longer-term funding objectives for the Scheme significantly sooner than anticipated, and Buck has done an outstanding job in preparing the Trustees for this transaction in very short order, as well as developing a pragmatic solution for managing the Scheme’s illiquid assets and ensuring that these did not become a stumbling block.
“I would also like to thank Reed Smith for the significant role they played in the legal aspects of this process, and for the flexibility demonstrated by Just in accommodating all of our requirements at such a busy time of year.”