Group Section of the FirstGroup Pension Scheme completes £90m buy-in with Aviva
Pensions & benefits Pension risk transfer Risk
The Group Section of the FirstGroup Pension Scheme (“the Scheme”) has concluded a £90 million full buy-in with Aviva Life & Pensions UK Limited (“Aviva”), securing the benefits of over 500 Scheme members.
The transaction represents a significant milestone in the Trustee’s and sponsoring employer’s de-risking journey, providing increased certainty and long-term security for members’ benefits.
The transaction was led by LCP on behalf of the Trustee. Legal advice was provided to the Trustee by Stephenson Harwood.
The process was completed on an accelerated timetable, with only 3 months between initial planning and the transaction completing. Close collaboration between the Trustee, FirstGroup Plc, Aviva and adviser teams enabled the parties to move quickly while maintaining a clear focus on achieving a strong outcome for members.
The transaction illustrates the continued competitiveness of the pension risk transfer market, and the ability of schemes with well-run processes to achieve attractive outcomes.
Lukshmi Selvarajah Capital Cranfield Pension Trustee Limited, Martin Carroll, Co-chair of the Trustee, said: "We are delighted to have completed this buy-in with Aviva, marking an important milestone in securing the benefits promised to our members.
"Throughout the process, our priority was to achieve a strong overall outcome, combining value for money and security for our members' benefits. The close collaboration between the Trustee, sponsor and adviser teams was essential in achieving this outcome within an accelerated timeframe."
Ryan Mangold, CFO, FirstGroup Plc, said: "Since 2020, we have settled about £1.7 bn of pension obligations, securing the pensions of former employees, substantially reducing pension risk and realising value for the group. Our remaining pension schemes are well funded, and our focus remains on managing them efficiently while maintaining a strong balance sheet to support our capital allocation priorities."
Rachel Hirst, LCP Partner and lead transaction adviser, said:
"This transaction demonstrates the value of a highly collaborative and focused approach. Working closely with the Trustee and sponsor, we are proud to have secured this positive outcome within 12 weeks of our appointment.
"Despite the pace of the process, we were able to create strong competitive tension and maintain a clear focus on the features that mattered most to the Trustee and members."
Kerry Foster, BPA Deal Manager at Aviva, said: "This transaction demonstrates what can be achieved through focused collaboration and a clear objective. Speed was an important priority throughout, and by working closely with the Trustee, LCP and scheme sponsor, we were able to complete the transaction efficiently while delivering a solution that secures members' benefits over the long term.
"We're proud to support the Scheme at this important stage of its journey and to provide the financial security and certainty that members can rely on in retirement."
