Standard Life has completed a £1.9bn bulk purchase annuity transaction with the Sedgwick section of the MMC UK pension fund.
Sedgwick Group was acquired by Marsh McLennan, the sponsoring employer in 1998. Mercer, which is also a Marsh McLennan company, acted as the lead broker on this transaction.
The transaction covers the benefits of around 6,500 members who were previously employed by the Sedgwick Group.
The buy-in includes novation of the section’s three existing longevity swaps with Canada Life Re, Munich Re, and The Prudential Insurance Company of America (PICA) from the Guernsey-based insurance captive vehicle, Mercer ICC Limited.
Separate teams at Mercer advised the trustee and Marsh McLennan, providing risk transfer, actuarial, investment, insurer financial strength and post-transaction management advice.
Linklaters and Herbert Smith Freehills Kramer provided legal advice to the trustee and Marsh McLennan, respectively. Eversheds Sutherland LLP advised Standard Life.
Standard Life director of defined benefit solutions Kieran Mistry says:: “We are pleased to have supported the trustee and company in securing their members’ benefits with a bulk purchase annuity policy.
“Executing this complex transaction required a highly collaborative approach between all parties, leveraging the strong relationships between Mercer, Standard Life and the reinsurers.
“We are grateful for the commitment and teamwork shown by the trustee, Marsh McLennan, and their advisers throughout the process, and the support of the teams at Canada Life Re, Munich Re, and PICA.”
Trustee chairman Bruce Rigby adds: “We see this bulk annuity transaction as the natural next step and a significant milestone for the Sedgwick section. The buy-in helps the trustee in continuing to safeguard the financial security of members’ benefits.
“The trustee and Marsh McLennan commissioned a full review of the bulk annuity market and selected Standard Life as the overall most attractive immediate and long-term partner for the fund’s Sedgwick section liabilities.”