Standard Life, part of Phoenix Group, has concluded a £1.7bn bulk purchase annuity transaction covering all members of the Gallaher Pension Scheme.
The transaction, which was completed in December, secures the benefits of 7,600 Scheme members. Members have been granted the right to additional pension increases in the event of high inflation as part of the transaction, enhancing their long-term financial security.
Standard Life had a record year in terms of BPA activity in 2021, with this transaction demonstrating the company’s continued expansion of its BPA offering, and it follows the £1.8bn buy-in announced last week. The contract’s assets will be used to continue Standard Life’s investment in UK infrastructure and socially responsible projects that are critical to the UK’s post-pandemic recovery.
The Trustees were advised by Aon and Hogan Lovells on the transaction, which is the first bulk annuity contract secured by them. Standard Life was advised by DLA Piper.
Standard Life managing director of defined benefit solutions Justin Grainger says: “We are delighted to have been selected to partner with the Trustee to secure the retirement incomes of their 7,600 members.
“This transaction demonstrates the ongoing commitment of Standard Life to the BPA market, and our ability to provide varied and flexible solutions to all sizes and types of schemes. We are pleased to welcome the Schemes’ members to Standard Life.”
Law Debenture trustee director and chair of the trustee of the schemes Robert Thomas says: “I’m delighted by the completion of this project to secure members’ benefits with Standard Life. The additional inflation provisions provide great long-term income protection for members in their retirement, which I am sure they will particularly value at this time of rising inflation. Standard Life were selected following a period of thorough preparation and a robust competitive tender process.”
Aon partner John Baines says: “Securing all benefits in a single transaction with significant benefits for all stakeholders of the Scheme has been a monumental achievement. By preparing thoroughly in advance, including asset de-risking over a number of years and a carefully structured transaction process, the Trustee benefited from a fiercely competitive auction process.”
