The Safeway Pension Scheme has completed a £1.4bn buy-in with Rothesay, securing the benefits of more than 22,500 members.

The buy-in, which required no contribution from the scheme's sponsoring employer, Morrisons, secured retirement benefits for 7,200 pensioners and dependants, as well as a further 15,300 deferred members.

Aon acted as the lead broker on the transaction on behalf of both the trustee and employer, while legal advice was provided to the trustee by Clifford Chance and to Rothesay by DLA.

The deal was completed through an accelerated process given the scheme’s readiness as it came to market, which in turn helped the trustee to lock in security for members quickly when the opportunity arose.

It also benefited from a Joint Working Group to expedite decision-making, as the parties involved were able to utilise the working relationship they had following a £762m buy-in between Rothesay and the 1967 Section of the Morrisons Retirement Saver Plan.

As a result of these two recent buy-ins, Rothesay has now insured over £2.1bn of the company’s pension liabilities.

Commenting on the deal, Safeway Pension Scheme chair of trustees and Vidett professional trustee, Steve Southern, said: “We are delighted to have now achieved pension security for all members of the Safeway Scheme. This represents an important part of our plan to guarantee that security for all the members we are responsible for as trustee.

“Working with Rothesay, Aon and Morrisons for the second time in a short timeframe allowed us to act quickly and decisively to achieve our de-risking goals.”

Adding to this, Aon partner, John Baines, highlighted the transaction as demonstration that value is still available for well-prepared schemes, with the Joint Working Group benefiting from their experience of four previous buy-ins on this scheme alone.

In addition to this, Baines cited the relatively high proportion of deferred members as a notable feature of the buy-in, pointing out that this might have been difficult to insure just a few years ago.

“It has been particularly pleasing to help develop this market, making bulk annuities more affordable for less mature schemes,” he stated.

Also commenting on the transaction, Rothesay business development, Róisín O’Shea, added: “We are delighted to have been able to work with the Joint Working Group and its advisers again to successfully execute this transaction with an accelerated process.

“Demand from pension schemes to de-risk using an insurance solution has never been as high as we’re currently seeing in the market. Rothesay’s significant capital strength, combined with swift execution and tailored solutions means we are very well-placed to help schemes reach their de-risking goals as soon as they are ready.”

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