LONDON (16 April 2019) – Aon (NYSE:AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, has advised the Trustees of the Bank of America Merrill Lynch UK Pension Plan (the Plan) on a £400 million pensioner buy-in with Scottish Widows.
The transaction covers all 915 pensioner members in the bank's largest pension scheme and represents the next significant step on the Plan’s de-risking journey, enhancing the security of members' benefits while giving rise to an improvement in the Plan's long-term funding position. Bank of America Merrill Lynch had already carried out two previous buy-ins for its smaller pension schemes.
Aon advised the Plan throughout the transaction, using its market-leading Bulk Annuity Compass platform, which has facilitated the completion of over £10 billion of bulk annuity deals since it was introduced in 2016. Use of Aon’s Compass platform enabled the Plan to move quickly at a time when pricing was attractive. Linklaters LLP provided legal advice throughout the process.
Peter Gibbs, chairman of Trustees of the Bank of America Merrill Lynch UK Pension Plan, said:
“This transaction allowed us to continue our programme of de-risking by securing a bulk annuity for pensioner members on favourable terms, which has led to an improvement in the funding position on the Plan's long-term funding basis. We are delighted with the advice and support provided by Aon and Linklaters throughout the transaction process, and to extend the bank’s existing relationship with Scottish Widows by entering this long-term partnership achieving greater security for members in the Plan.”
John Baines, head of Bulk Annuities at Aon, said:
“It was a pleasure to support the Trustees and Bank of America Merrill Lynch in completing the buy-in. As a financially sophisticated Trustee Board, understanding the additional security that could be provided to members through an insurance solution was a particularly important aspect of this transaction. Their understanding of market dynamics allowed the Trustees to navigate a busy market and quickly lock into great pricing.”
Matt Wilmington, head of Origination and Structuring, Scottish Widows, said:
"We are proud that the Trustees have chosen to insure members' benefits with us as part of their ongoing de-risking plan. Working collaboratively with Aon, Linklaters and the Trustees, we were able to deliver an attractive price and complete the transaction within weeks of being selected as the Trustees' preferred provider."
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Notes to Editors
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