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Case study

£120m full buy-in in record time

Pensions & benefits Pension risk transfer

How West Ferry Printers took advantage of attractive insurer pricing and transacted within 3 months.

The background

The West Ferry Printers Pension Scheme is a c£300m scheme with an existing £180m buy-in policy with Aviva covering the majority of current pensioners. The Scheme is sponsored by Reach plc, the largest national and regional news publisher in the UK with brands including the Mirror. Towards the end of 2020, Reach plc approached the Trustee about a potential restructuring of the sponsoring business and the possibility of insuring the Scheme in full. LCP has a longstanding relationship with the Scheme acting as scheme actuary, investment and de-risking adviser and supported the Trustee in these discussions.

Our approach

After considering initial price estimates, LCP approached insurers to seek firm quotations for the remaining uninsured liabilities - these were c90% deferred members. The Trustee moved quickly, working collaboratively, with the sponsor to seek price certainty ahead of the year-end as part of the wider business restructuring. The Trustee chose to sell its’ equity holdings to partially stabilise the funding shortfall early. Rothesay agreed to provide a transactable price within four weeks – this was due to a clear process and Rothesay’s experience of transacting with LCP. Pricing offered by Rothesay was very attractive for this liability profile and was within the sponsor’s budget. With a clear recommendation from LCP, it was agreed to work towards exclusivity with Rothesay without delay.

Rothesay offered to lock their price to a transparent mechanism which gave certainty amidst potentially turbulent economic conditions over the year-end. The Trustee moved quickly to sell its remaining return-seeking assets and restructured its LDI portfolio over the Christmas period to align with Rothesay’s price-lock. Once the funding shortfall was fixed, formal exclusivity was agreed with Rothesay in early January which gave time for contractual documentation to be agreed and signed in mid-February 2021.

The outcome

The £120m buy-in fully insured the Scheme providing long-term security for members and cost certainty for Reach plc so it could restructure the business.

We are delighted to have now secured the pension benefits for all members of our scheme, achieving our goal of providing members with long-term security. It is a testament to the expertise of our advisers and Rothesay’s ability to move quickly that we were able to meet the ambitious timetable required to achieve this positive outcome.

John Pannett, Chair of the Trustee for West Ferry Printers Pension Scheme