Marvin OnumonuStandard Life, part of Phoenix Group, completed a £1.9bn bulk purchase annuity (BPA) deal with the Sedgwick Section of the MMC UK Pension Fund.
The transaction covered the benefits of around 6,500 members, all former Sedgwick Group staff.
Marsh McLennan was the sponsoring employer, and Mercer acted as the lead broker.
The buy-in included novating three existing longevity swaps with Canada Life Re, Munich Re, and The Prudential Insurance Company of America (PICA) from the Guernsey-based insurance captive vehicle, Mercer ICC Limited.
Mercer provided risk transfer, actuarial, investment, insurer financial strength and post-transaction management advice to both the trustee and Marsh McLennan using separate teams.
Linklaters and Herbert Smith Freehills Kramer advised the trustee and Marsh McLennan. Eversheds Sutherland LLP acted for Standard Life.
Kieran Mistry, director of defined benefit solutions at Standard Life, said: “We are pleased to have supported the Trustee and Company in securing their members’ benefits with a bulk purchase annuity policy.
“Executing this complex transaction required a highly collaborative approach between all parties, leveraging the strong relationships between Mercer, Standard Life and the reinsurers.
“We are grateful for the commitment and teamwork shown by the Trustee, Marsh McLennan, and their advisers throughout the process, and the support of the teams at Canada Life Re, Munich Re, and PICA.”
Trustee Chairman Bruce Rigby said: “We see this bulk annuity transaction as the natural next step and a significant milestone for the Sedgwick Section.
“The buy-in helps the Trustee in continuing to safeguard the financial security of members’ benefits.
“The Trustee and Marsh McLennan commissioned a full review of the bulk annuity market and selected Standard Life as the overall most attractive immediate and long-term partner for the Fund’s Sedgwick Section liabilities.”
Phil Parkinson, UK investments and retirement leader at Mercer, said: “We are delighted to have led this transaction, utilising our extensive and varied risk transfer capabilities across two separate risk transfer teams working on behalf of the Trustee and Marsh McLennan.
“Both teams collaborated closely with Standard Life, the reinsurers and the various legal advisers to optimise pricing and terms, maximise efficiency and minimise risk for both the Trustee and Marsh McLennan.
“I also want to commend the Mercer actuarial and investment teams who were pivotal to reaching this position and also instrumental to the transaction.”
Parkinson added: “With the new guidance on end-game options, Mercer is working with clients to provide flexibility so they can find the right strategy to suit their individual objectives and situation.”
