Marvin OnumonuAon has advised the Mouchel Business Services Limited Pension Scheme (Money Purchase Section), sponsored by Kier Group Limited, on a £9.5m transaction to secure all members’ benefits with Just Group.
The deal was supported by the Smart Pension Master Trust.
The Mouchel Money Purchase Section was a defined contribution (DC) scheme with a defined benefit (DB) underpin.
This meant the scheme would top up members’ benefits if their DC pot was not enough at retirement.
The structure made it hard to secure insurance, so the form of members’ benefits was changed after consultation and access to financial advice and information.
Aon provided strategy advice, project management, risk settlement broking, member options support, guidance, and defined contribution investment advice for the deal.
Russell Powles, associate partner and head of Aon’s underpin team, said: “This is a fantastic outcome for the scheme and its 220 members – and only achieved by working closely with Vidett, the scheme trustees, Kier Group Limited and Just.
“The project involved a complex underpin scheme that required an innovative and collaborative solution with Just, and which was led by Aon’s specialist underpin team, combining expertise in member options and risk settlement.
“Communications and member options support were vital to the success of the exercise.”
Powles added: “Members were provided with paid-for independent financial advice which – prior to the transaction – helped them to consider their options and to choose the shape of benefits that would best suit their needs.”
Curtis Mitchell of Vidett said: “On behalf of Vidett and the Trustee we are very pleased to complete this transaction which secures the benefits of the scheme’s 220 members.
“Due to the complexity of the scheme, this was no normal risk transfer exercise.
“Aon was instrumental in ensuring that the exercise was completed to plan, in line with our objectives and providing or arranging all necessary requirements for the project.”
Mitchell added: “The project also required a significant level of legal advice, provided by Hogan Lovells.
“This legal advice was concise and delivered on time, which was important for ensuring the project progressed as desired.
“Kier Group Limited also played a fundamental role in the transaction, supporting the Trustee throughout.”
Jas Bhogal of Kier Group Limited said: “This was a very complex piece of work, with several workstreams.
“The technical expertise provided by all of the consultants in our working group was invaluable in completing this project on time and in achieving good outcomes for the members of the MBS-MP scheme.”
Geraint Jones, senior BDM at Just, said: “We’re pleased to have secured the benefits of all the members of the scheme.
“By working closely with Aon’s specialist underpin team, we were able to support an innovative solution that unlocked the potential for members’ benefits to be insured and provides long-term certainty.
“Key to delivery was our Beacon pricing service which facilitated ongoing price monitoring during the pre-transaction process.”
Jones added: “This transaction is a positive development for trustees and sponsors who are looking to insure similar schemes that have defined contribution benefits with defined benefit underpins.”
