UK's Imperial Tobacco Pension Fund completes £1.8bn buy-in

The Imperial Tobacco Pension Fund has completed a £1.8bn buy-in with Standard Life, with the deal covering approximately 6,600 defined benefit (DB) members’ liabilities.

As reported by our sister publication, Pensions Age, Hymans Robertson acted as lead adviser to the trustee of the scheme in what is the largest buy-in completed in the UK in 2021 to date.

The trustee received funding and investment advice from WTW and Isio respectively, while legal advice was provided to the scheme by Osborne Clarke and CMS.

Eversheds Sutherland provided legal advice to Standard Life.

Completed as part of its de-risking strategy, the transaction is the scheme’s first bulk annuity arrangement.

Standard Life said the transaction, which is the firm’s largest to date, demonstrated its “credentials, commitment to and ambition in” the bulk annuity market.

The firm stated that it had quoted on around 90 per cent of deals in the market by volume over the course of 2021.

“We are delighted to have completed this bulk annuity transaction with Standard Life,” said Imperial Tobacco Pension Fund chair of the trustee, Helen Clatworthy.

“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.”

Imperial Tobacco Pension Fund independent trustee, David Fripp, added: “This buy-in was the culmination of many months of hard work and close collaboration between a number of parties, largely while working remotely, and we are pleased to announce this at the start of the new year.

“The fund initially set robust success criteria and is grateful to our advisers for their insights and leadership in helping us to meet and exceed these criteria.”

Standard Life managing director of defined benefit solutions, Justin Grainger, said the insurer was “looking forward” to working with the trustee of the fund.

He continued: “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.”

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