RCS - Rothesay Life PLC - Rothesay signs £1.2bn buy-in for Co-operative Bank

XPS PensionsAnnouncement

13/12/2022 13:45

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RNS Number : 5657J  Rothesay Life PLC  13 December 2022

 

13 December 2022

Rothesay secures £1.2bn full scheme buy-in for The Co-operative Bank

· £1.2bn full scheme buy-in insures the liabilities of The Bank Section of
the Co-operative Pension Scheme

· Transaction protects the pension benefits of more than 9000 members -
c.2500 pensioners and c.6500 deferred pensions

· Eighth transaction of 2022 for Rothesay, with the insurer also exclusive
and in execution on more than £5bn of new business with other pension schemes
over the remainder of the year and into 2023

Rothesay, the UK's largest specialist pensions insurer, today announces that
it has completed a £1.2bn full scheme buy-in with The Bank Section (the
"Section") of the Co-operative Pension Scheme (the "Scheme"). The Section is
sponsored by The Co-operative Bank (the "Sponsor"), the
Manchester-headquartered retail and SME bank.

The transaction secures the benefits for all uninsured members of the Section
- defined benefit liabilities for 2474 pensioners and dependants and a further
6531 deferred members, following a £400m buy-in in 2020.

This buy-in, which required no contribution from the Sponsor, is part of a
long-term plan to de-risk the Scheme, and the Trustee and Rothesay have been
working together on this transaction since early 2022.

The agreement features residual risks, and the premium was locked to the
Section's asset portfolio and paid by in specie transfer.

The Co-operative Bank buy-in is the eighth transaction of 2022 for Rothesay,
and the insurer is also exclusive on a further £5bn of new business that is
expected to complete by the end of this year and into the next.

The lead broker on the transaction was Aon, acting for the Trustee. Legal
advice was provided to the Trustee by Linklaters and to Rothesay by Gowlings
WLG. The Bank was advised by XPS Pensions Group and Clifford Chance.

Tom Pearce, CEO of Rothesay, said: "We are very pleased to support The
Co-operative Bank with this important step in its journey toward buy-out.
After working with the trustee and their advisers for some time, we have been
impressed by their focus on the end goal and determination to provide pension
security for all their members.

Demand for de-risking is the strongest we have ever seen and there are
exciting new business opportunities stretching out into 2023. Our significant
capital surplus means we are very well-placed to execute against this demand,
so the outlook has never been more positive."

Chris Martin, Chair of Trustees, said: "We are delighted to have taken this
significant step in our de-risking plans, further improving member security.
Our advisers' commitment to our cause and Rothesay's flexibility and market
insight meant we were able to navigate the recent volatility and design an
innovative solution."

Nick Slape, CEO of The Co-operative Bank, said: "The Bank is supportive of the
strong stewardship and de-risking actions taken by the Trustee.  This
delivers a positive outcome for members of the Bank Section, through offering
enhanced protection of benefits, whilst also supporting our corporate
objectives.   I am delighted that we have been able to work co-operatively
with the Trustee and Rothesay to reach this point"

Martin Bird, Senior Partner at Aon said: "In what has proven to be one of the
most volatile and busy years on record, we are extremely pleased to have
supported the Trustee in achieving this significant milestone, helping to
provide further security for members of the Section."

Phil Goss from Linklaters said: "Having worked with the Scheme for a number of
years, it's been very rewarding to support the Trustee as they prepared for
and completed this major step. This transaction shows once again that, with a
collaborative approach from all stakeholders, solutions can always be found
for even quite complex and non-standard risks."

ENDS

Media Contacts

Rothesay: Anthony Marlowe, Head of Communications & Public Affairs

+44 (0)7912 550184 or anthony.marlowe@rothesay.com
(mailto:anthony.marlowe@rothesay.com)

Temple Bar Advisory: Alex Child-Villiers +44 (0)7795 425580, Will Barker +44
(0)7827 960151 or Sam Livingstone +44(0) 7769 655437 or
rothesay@templebaradvisory.com (mailto:rothesay@templebaradvisory.com)

 

Notes to Editors

About Rothesay

Rothesay is the UK's largest pensions insurance specialist, purpose-built to
protect pension schemes and their members' pensions. With over £50 billion of
assets under management, we secure the pensions of more than 810,000 people
and pay out, on average, approximately £200 million in pension payments each
month.

 

Rothesay is dedicated to providing excellence in customer service alongside
prudent underwriting, a conservative investment strategy and the careful
management of risk. We are trusted by the pension schemes of some of the UK's
best known companies to provide pension solutions, including Asda, British
Airways, Cadbury's, the Civil Aviation Authority, National Grid, the Post
Office and telent.

 

Rothesay has two substantial institutional shareholders, GIC and Massachusetts
Mutual Life Insurance Company ("MassMutual"), who provide the company with
long-term support for its growth and development. In September 2020, our
shareholders increased their investment in Rothesay through a transaction
which valued the business at £5.75bn at that time.

 

Rothesay refers to Rothesay Limited and its subsidiaries and is the trading
name for Rothesay Life Plc, an insurance company authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority. Firm Reference Number: 466067. Rothesay Life
Plc is registered in England and Wales with company registration number:
06127279 and registered address: Rothesay Life Plc, The Post Building, 100
Museum Street, London WC1A 1PB. Further information is available at
www.rothesay.com (http://www.rothesay.com)

 

About The Co-operative Bank

 

The Co-operative Bank plc provides a full range of banking products and
services to retail and SME (Small and Medium Sized Enterprises) customers and
is committed to values and ethics in line with the principles of the
co-operative movement.

 

In 1992 The Co-operative Bank took a pioneering step to become the UK's first
bank to have a customer-led Ethical Policy. And it's still unique today. The
Bank's Ethical Policy defines how it acts as a business, the causes it
supports and the ways it uses (and won't use) customers' money. It is shaped
by the views of customers in regular Values & Ethics Polls.

 

In 2022 The Co-operative Bank is celebrating its 150th year of providing
ethical banking services, and remains strongly positioned to provide an
ethical alternative in the UK banking market.]

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