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Standard Life Completes £1.8bn Bulk Purchase Annuity Pensioner Buy-In

• Buy-in covers benefits of 6,600 defined benefit pension fund members
• Transaction removes risks associated with pension fund liabilities
• Policy purchased by Trustee of the Fund as part of its de-risking strategy

Standard Life, part of Phoenix Group, has completed a £1.8bn Bulk Purchase Annuity (“BPA”) transaction covering c.6,600 pensioner members of the Imperial Tobacco Pension Fund (“the Fund”), which is sponsored by Imperial Brands Plc.

The transaction demonstrates Standard Life’s credentials, commitment to and ambition in the BPA market.

This deal is part of the continued development and growth of Standard Life’s offering within the BPA space, which has seen it quote on ~90% of deals in the market by volume over the course of 2021, and also highlights Standard Life’s ability to work with pension scheme trustees and their advisers to meet their specific needs.

The Phoenix Bulk Purchase Annuity business was aligned under the Standard Life brand in October 2021, in recognition of Standard Life’s pensions and savings heritage and market expertise.
Hymans Robertson acted as lead advisers to the Trustee for this transaction – the first bulk annuity arrangement completed by the Fund. The Trustee received funding and investment advice from Willis Towers Watson and Isio respectively. Transaction legal advice was provided to the Fund by Osborne Clarke and CMS, whilst Eversheds Sutherland advised Standard Life.

Justin Grainger, Managing Director of Defined Benefit Solutions at Standard Life, said: “This transaction demonstrates the expertise within the Standard Life team and our continued commitment to the BPA market. We are looking forward to working with the Trustee of the Fund, having been selected as their partner in this transaction. This transaction helps the Trustee by protecting the members of the Fund and reducing the risks associated with holding pension scheme liabilities.

“We are committed to working with potential clients and their advisers to tailor the defined benefit solutions we offer, to work for all parties. The growth of our BPA business continues to fuel our investment into UK infrastructure and socially responsible projects that provide good returns as well as delivering for the communities that we serve.”

Helen Clatworthy, Chair of the Trustee of the Fund, said: “We are delighted to have completed this bulk annuity transaction with Standard Life. This buy-in is a major step in the Fund’s de-risking strategy and significantly improves the security of members’ benefits. Hymans Robertson’s expertise was instrumental in delivering this excellent result for the Fund, and we valued Standard Life’s willingness to work in partnership with us in meeting our objectives.”

Michael Abramson, Partner at Hymans Robertson, said: “Hymans Robertson are proud to have advised the Trustee on a highly bespoke buy-in transaction. Through close collaboration between all parties and Standard Life’s willingness to innovate with us, a fantastic outcome has been achieved for the Fund.”

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