Small Scheme Bulk Annuity Purchase

The Sponsoring Employer had previously made it known to the Trustee that they were supportive of a move to fully insuring a small legacy DB pension scheme (less than 50 members and scheme assets of c. £6m). However, whilst the Trustee had engaged with its advisers with a view to obtaining buy-out quotations, no insurers were prepared to quote as the size of the scheme made it a less attractive proposition when compared to other potential transactions that the insurers were focusing their resource on. The Trustee continued to approach the insurer market on a regular basis to see if their position had changed, but without any success.

As the Employer remained keen for the scheme to not run on indefinitely and as a result retain responsibility for the ongoing costs, we approached some of our wider adviser contacts in June 2019 to see if they could help through the provision of their consolidation services offering that we had previously discussed with them. By doing so, we were able to utilise the services of a buyout comparison services provider which took all of its schemes to the market as a single file. The scheme gained immediate traction with the insurers as a result of this offering and following agreement with the insurer and Employer around the pricing, we were able to successfully complete a buy-in December 2019, with the scheme moving to full buy-out in February 2020. This represented the best possible outcome for both the members and their beneficiaries whose benefits were not fully insured, as well as for the Employer who no longer has to worry about the ongoing burden of costs associated with the scheme.