The Sedgwick Section of the MMC UK Pension Fund has completed a £1.9bn buy-in with Standard Life, covering the benefits of all members of this section of the scheme. 

The buy-in secured retirement benefits for around 6,500 members who were previously employed by Sedgwick Group, acquired by Marsh McLennan in 1998.

It also included novation of the section’s three existing longevity swaps with Canada Life Re, Munich Re, and The Prudential Insurance Company of America (PICA) from the Guernsey-based insurance captive vehicle, Mercer ICC Limited.

Mercer, a business of Marsh McLennan, acted as lead broker on the transaction, although separate teams advised the trustee and Marsh McLennanan. This included risk transfer, actuarial, investment, insurer financial strength, and post-transaction management advice.

In addition to this, legal advice was provided to the trustee by Linklaters and to Marsh McLennan by Herbert Smith Freehills Kramer, while Eversheds Sutherland LLP advised Standard Life.
 
Trustee chairman, Bruce Bigby, suggested that the buy-in will help the trustee to continue safeguarding the financial security of members' benefits, highlighting the deal as the "natural next step and a significant milestone for the Sedgwick Section". 

“The trustee and Marsh McLennan commissioned a full review of the bulk annuity market and selected Standard Life as the overall most attractive immediate and long-term partner for the Fund’s Sedgwick Section liabilities," he stated. 

Adding to this, Standard Life director of defined benefit (DB) solutions, Kieran Mistry, said: “We are pleased to have supported the Trustee and Company in securing their members’ benefits with a bulk purchase annuity policy.

"Executing this complex transaction required a highly collaborative approach between all parties, leveraging the strong relationships between Mercer, Standard Life and the reinsurers.
 
“We are grateful for the commitment and teamwork shown by the trustee, Marsh McLennan, and their advisers throughout the process, and the support of the teams at Canada Life Re, Munich Re, and PICA.”
 
Also stressing the importance of collaboration, Mercer UK Investments and retirement leader, Phil Parkinson, said: “We are delighted to have led this transaction, utilising our extensive and varied risk transfer capabilities across two separate risk transfer teams working on behalf of the trustee and Marsh McLennan.

"Both teams collaborated closely with Standard Life, the reinsurers and the various legal advisers to optimise pricing and terms, maximise efficiency and minimise risk for both the Trustee and Marsh McLennan.

"I also want to commend the Mercer actuarial and investment teams who were pivotal to reaching this position and also instrumental to the transaction."

This article was originally published on our sister website, Pensions Age.

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