The Bayer Group Pension Plan has agreed a £280m buy-in with Canada Life, securing the benefits of more than 1,300 retirees.

The buy-in covered around 40 per cent of the plan’s pensions in payment, in turn reducing its exposure to investment and longevity risk.

An umbrella contract was agreed as part of the transaction, which is expected to enable the trustee to potentially insure further liabilities efficiently if and when further opportunities arise.

The transaction was steered by a group of representatives from the scheme trustee, chaired by Independent Governance Group executive chair, Chris Martin, the sponsoring employer, Bayer Plc, and the parent company, Bayer AG.

It was led by LCP, while legal advice was provided to the trustee by CMS, and to Canada Life by Eversheds Sutherland. Isio provided advice to Bayer Plc.

Commenting on the deal, Martin stated “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.”

Adding to this, Canada Life managing director, bulk purchase annuities, Tim Coulson, said: “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.”

LCP partner, Rachel Hirst, echoed this, highlighting the transaction as demonstration that, "despite the market being exceptionally busy, effective collaboration and thorough preparation still allows schemes to access strong insurer engagement and attractive opportunities".

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