LCP advises Church of England Pensions Board on £145m buy-in with Aviva for the Church Workers Pension Fund

LCP are pleased to have advised the Church of England Pensions Board (“the Board”) on its £145m “buy-in” with Aviva, the insurance, wealth and retirement provider. The deal completed in October 2024. This transaction – for the Church Workers Pension Fund (CWPF) - follows on from previous buy-ins with Prudential in 2013 and Aviva in 2022. It means that all pensions within the CWPF Defined Benefit Scheme are now backed by insurance policies.

“This transaction is a great result for scheme members and Church employers,” said Clive Mather, Chair of the Church of England Pensions Board. “It is a prudent step which has been made possible by a long run of strong investment returns, cost savings, and collaborative working with employers. Reaching this point is a key milestone for this scheme, opening up possibilities for the future.”

The Pensions Board paid a £145m premium to Aviva, in return for an income stream which will exactly match pensions that need to be paid to current retired members and future retiring members. This third and final buy-in step removes the exposure to investment and longevity risk, which materially reduces the risk of a future funding deficit.

Aviva was selected on the back of extensive due diligence by the Board and following the release of the Charter for Sustainability in Bulk Annuities. The charter, which was co-created by the Board, provides a means to translate pension schemes’ sustainability goals into these types of buy-in insurance contracts, and to determine whether an insurer meets the required levels of commitment to sustainability.

The Board acted in its capacity as the trustee of the Church Workers Pension Fund (“CWPF”) for this transaction. It was advised by LCP, with Linklaters providing legal advice, Mercer providing investment advice, and Cardano providing covenant advice.

Toby Holmes, Senior Deal Manager at Aviva said “We’re pleased that the Trustee of the Church Workers Pension Fund has again selected Aviva to secure the benefits for the remaining members of the scheme. This has been a very smooth process run by a well prepared and well-advised scheme. The Trustees put ESG and responsible investing at the heart of their decision making and we’re proud to have been able to demonstrate our commitment in this area.”

David Salter, LCP Partner, said: “We are delighted to have been able to help the Pension Board in securing this buy-in with Aviva. Despite how busy the bulk annuity market is at the moment, it is great to see the Board engaged on selecting an insurer on more than just pricing, and putting sustainability at the centre of their decision-making process.”