Rothesay Life Secures Biggest De-Risking Deal of 2015

The £1.6 billion buy-in of the aviation pension is the second biggest deal of its kind in the UK.

Pension insurer Rothesay Life has sealed a £1.6 billion ($2.5 billion) buy-in with the UK’s Civil Aviation Authority Pension Scheme (CAAPS).

The transaction is the second largest buy-in involving a UK pension, and the largest de-risking deal of 2015 so far.

The buy-in meant a “significant reduction in the level of risk for the fund and its members”, said Joanna Matthews, independent chair of the pension.

CAAPS—which provides pensions for the aviation regulator—had assets of £7.25 billion at its most recent report, and caters for roughly 14,000 members.

 “The staff of CAAPS, our advisers, and Rothesay Life have collaborated very professionally and in a highly efficient manner to achieve this excellent outcome for the scheme,” Matthews added. “The transaction went extremely smoothly thanks to the very high quality of our data and processes.”

Rothesay has had a busy year: it bought a £1.2 billion book of individual annuities from Zurich in May, the same month as it completed a £675 million buy-in of the Lehman Brothers UK pension. In January it reinsured £2.8 billion of its bulk annuity liabilities through longevity swaps with Prudential Retirement and Pacific Life Re.

Related: DB Plans Eye Annuity Buyouts Despite Pricing Fears & Why Pension De-Risking Could Threaten Financial Stability