LCP advises on c.£280m buy-in between Canada Life and the Bayer Group Pension Plan
Pensions & benefits Pension risk transfer Risk
Canada Life Limited (“Canada Life”) today announces that it has agreed a c£280 million buy-in with the Bayer Group Pension Plan (“the Plan”), insuring the benefits of more than 1,300 retirees. The buy-in covers around 40% of the Plan’s pensions in payment, reducing the Plan’s exposure to investment and longevity risk.
The transaction was steered by a collaboration of representatives from the Plan’s Trustee, chaired by Chris Martin of Independent Governance Group, the sponsoring employer, Bayer Plc, and the parent company, Bayer AG. Bayer Plc is a leader in pharmaceuticals, consumer health and crop science.
An umbrella contract has been established as part of the transaction, enabling the Trustee to potentially insure further liabilities efficiently if and when further opportunities arise.
The transaction was led by LCP on behalf of the Trustee. Legal advice was provided to the Trustee by CMS. Eversheds Sutherland provided legal advice to Canada Life. Isio provided advice to Bayer Plc.
Tim Coulson, Managing Director, Bulk Purchase Annuities at Canada Life commented:
“With de-risking solutions now a realistic option for many more pension schemes, we are delighted to be able to help the trustee to further secure the future of members’ benefits. Further opportunities are available to the scheme when conditions allow under this transaction. This has been delivered on favourable commercial terms during a period of intense market activity and is the result of all parties involved working together to deliver the best possible outcome for both the scheme trustee and members.”
Chris Martin, Independent Governance Group, Chair of Trustees
“We are delighted to have taken this step to de-risk the Plan and to further improve the security of members’ benefits. The transaction represents a significant milestone in the Plan’s journey, made possible due to the excellent constructive collaboration between the Trustee, Company and our respective advisory teams.”
Rachel Hirst, Partner, LCP
“It has been a pleasure to advise the Trustee on the Plan’s first buy-in transaction, achieving a great outcome for the Plan and its members. This transaction demonstrates that, despite the market being exceptionally busy, effective collaboration and thorough preparation still allows schemes to access strong insurer engagement and attractive opportunities.”