Aviva has completed a £925 million bulk purchase annuity transaction with the Trustee of the Marks and Spencer Pension Scheme.

This buy-in transaction represents Aviva’s largest bulk annuity deal to date, covering the liabilities for a proportion of the Scheme’s retired members. It builds on the important wider existing corporate relationship that Aviva already has with Marks and Spencer, for which it provides health and general insurance along with travel insurance for its retail banking customers.

Members will see no change in the amount of benefits or the way in which they are paid as a result of the transaction. It establishes a framework for further, longer term de-risking via the ‘umbrella’ structure now in place.

Last year, Aviva identified bulk annuities as a significant growth opportunity for its UK and Irish businesses and is well-placed to grow in both markets due to its investment capabilities and strong balance sheet. Over the last six months Aviva has expanded its bulk annuity team adding over 30 people, as it competes for larger bulk annuity transactions.

“We’re delighted that the Marks and Spencer Pension Scheme has chosen us to insure a proportion of the pension benefits of its members. Not only does this latest deal build on the great relationship we already have with Marks and Spencer but as our largest bulk annuity deal to date, it also perfectly demonstrates our increased appetite for bigger deals. As the UK’s largest multi-line insurer, we’re in a pretty unique position as a provider as we can offer our clients a whole range of insurance products and our customers really appreciate the simplicity this provides.” Tom Ground, managing director of defined benefit solutions at Aviva

Graham Oakley, Chairman of the Marks and Spencer Pension Trust, said: “The Scheme’s strong funding position has allowed the Trustee to follow a strategy of reducing risk by aligning investments more closely with the pension benefits we will need to pay to members. This bulk purchase annuity is a significant step in reducing longevity risk being managed by the Trustee, providing additional security for all members’ benefits.”

The competitive bidding process to select an insurer and negotiate terms was led by LCP on behalf of the Trustee.

In October 2017, Aviva announced the completion of what was, until now, its largest bulk annuity deal to date - a £600 million pensioner buy-in with The Pearson Pension Plan.

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