Key Takeaways
- • Hickson Group's pension fund completed a £208m bulk purchase annuity (BPA) transaction, according to Mayer Brown, which advised on the deal.
- • The transaction transfers pension liabilities to an insurer, removing them from the scheme's balance sheet and shifting risk away from the company's sponsor.
- • The source provides no details on the insurer, number of members, or pricing terms, so the scale of the deal is limited to the headline value.
Summary
Bulk purchase annuities are a common de-risking tool for UK defined benefit pension schemes. Under such arrangements, a scheme pays a premium to an insurer, which then takes on responsibility for paying pensions to a defined group of members. This removes the associated longevity, investment and funding risks from the scheme and, typically, from the sponsoring employer's balance sheet.
The primary source does not identify the insurer, the number of members covered, or the pricing relative to scheme liabilities. Readers seeking those specifics should consult the transaction parties or the scheme's trustees. The announcement is primarily of interest to pension trustees, sponsoring employers and advisers active in the UK pension risk transfer market.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.