LCP's De-risking team has advised on a £350 million bulk purchase annuity buy-in transaction between Aviva and the Trustees of the Coats UK Pension Scheme. 

Aviva will insure the defined benefit pension liabilities for around 3,700 members, removing the investment and longevity risk of these members from the scheme.  Members will see no change in the amount of their benefits or the way in which they are paid as a result of the transaction. 

The transaction was instigated by a joint working group of the scheme’s Trustees and Coats Group plc management, which was established to build on past risk management actions and set the scheme on a journey towards full insurance. 

The scheme Trustees were independently advised throughout the process by LCP (de-risking)  Redington (investment) and Sackers (legal).  Coats was advised by Isio.  

Jamie Cole, Head of Bulk Purchase Annuity Origination at Aviva, said: “We’re extremely pleased that the Trustees of the Coats UK Pension Scheme selected Aviva to support their de-risking journey.  All parties worked collaboratively on this transaction which secures the benefits for a significant proportion of the scheme’s members and supports the Sponsor’s long-term ambition to remove risk from their balance sheet.  It is clear that Aviva’s sustainability commitment played an important part as it aligns with Coats’ own views."

Michelle Wright, Partner at LCP added: “We are delighted to be able to help the Trustees secure members’ benefits with Aviva. The transaction highlights the importance of close collaboration between the Trustees and the sponsoring employer, enabling the Trustees to move swiftly in challenging markets.” 

Chris Martin, Trustee Chair of the Coats UK Pension Scheme said: “We are delighted to have taken this further step in improving the security of members’ benefits. The collaboration between the Trustees and Company and our respective advisers, including the outstanding support from our Pensions Office, has been absolutely at the heart of being able to deliver this outcome. Aviva’s sustainability commitment, and its alignment with our beliefs, was a key factor in the selection of our buy-in partner.” 

Jackie Callaway, CFO of Coats Group plc said: “The completion of the buy-in reflects a constructive and collaborative working relationship between Coats and the Trustees, with Aviva helping us to achieve our objectives.  I would like to thank all involved for helping us get to this position, which will benefit all stakeholders.”