The Mouchel Business Services Limited Pension Scheme, sponsored by Kier Group Limited, has completed a £9.5m risk transfer transaction with Just Group, securing the benefits of all 220 members.
The transaction, advised by Aon plc, relates to a defined contribution (DC) arrangement with a defined benefit (DB) underpin, under which the scheme committed to ‘top up’ members’ benefits at retirement if their DC pot was insufficient.
The complexity of the underpin meant it could not be secured in its existing form.
To facilitate the insurance solution, the structure of members’ benefits was changed, with members consulted and given access to educational materials and paid-for independent financial advice.
The deal also included a pre-planned accelerated move to full administration.
Just’s partnership with the Smart Pension Master Trust enables different components of members’ benefits to be managed through a linked service.
Aon provided strategy advice and project management, risk settlement broking, member options support and guidance, and DC investment advice.
Kier Group Limited director of pensions and benefits, Jas Bhogal, described the transaction as “a very complex piece of work” involving several workstreams, and said the technical expertise of the working group's advisers was invaluable in delivering the project on time and achieving good outcomes for members.
Vidett professional trustee, Curtis Mitchell, said the trustee was “very pleased” to complete a transaction that secured members’ benefits.
He noted that the complexity of the scheme meant the project was “no normal risk transfer exercise”, adding that Aon ensured the transaction was delivered in line with the trustee’s objectives.
He also highlighted the role of legal advice provided by Hogan Lovells in enabling the project to progress as planned, and said Kier Group Limited played a fundamental role in supporting the trustee throughout.
Meanwhile, Just senior business development manager, Geraint Jones, said the insurer was pleased to have secured all members’ benefits.
He added that Just’s Beacon pricing service facilitated ongoing price monitoring during the pre-transaction process and argued that the deal demonstrated how schemes with DC benefits and DB underpinnings can access insurance solutions that provide long-term certainty.
Aon associate partner and head of underpin team, Russell Powles, said the transaction was “a fantastic outcome” for the scheme and its members.
He said the project required an innovative and collaborative approach, led by Aon’s specialist underpin team, combining expertise in member options and risk settlement.
Powles added that communications and member support were critical, with members receiving paid-for independent financial advice before the transaction to help them assess their options and select the benefit structure most appropriate to their needs.
