Two unnamed pension schemes have completed a £85m buy-in with Canada Life, securing member benefits across the two schemes for a total of 189 pensioners and 87 deferred members.

K3 Advisory led on the deal, while Cartwright provided administration, actuarial and investment advice, and legal advice was provided to trustees by Reed Smith.

Commenting on the deal, the chair of trustees for the schemes thanked Cartwright and K3 for completing this “first of its kind” transaction.

“I can always trust them to come up with an innovative approach perfect for our situation," they stated.

K3 Advisory senior actuarial consultant, Thomas Crawshaw, also said that this was a “particularly interesting” case as the transaction was only affordable due to the employer recovery contributions that had been committed to.

However, Crawshaw said that K3 wanted to avoid a traditional deferred premium structure, which can be “off-putting” to some insurers and relatively expensive in the current climate, instead devising a method to proceed with the transaction without needing to deter the premium.

“In doing so we were able to ensure the transaction went through smoothly and member benefits were secured," he continued. "A very satisfying outcome and, we believe, a market first."

Adding to this, Cartwright director of investment consulting, Sam Roberts, said: "The sponsor and the trustees now have significant certainty, and a clear runway to ultimate wind up of the schemes, which is particularly helpful given the likely corporate timelines of the private equity owned sponsor.

“It also allowed us to work around some illiquid assets which could take two or three years to run off. A vanilla approach quite simply would not have worked in this case.”

Canada Life head of business development, Linda Gilhooly, added: “Working with K3 and Cartwright was an extremely positive experience.

“They were able to successfully address and resolve all issues that, as insurers, can sometimes make things more problematic for us. We were really pleased to have been able to successfully provide security for the members of these schemes.”

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