Aviva completes £400m bulk annuity deal with Deutsche Bank

6 April 2023

Aviva has completed1 a £400 million bulk purchase annuity buy-in transaction with the trustees of the DB (UK) Pension Scheme.

Aviva will insure the defined benefit pension liabilities for nearly 1,300 members, removing the investment and longevity risk of these members from the Scheme. Members will experience no change in the amount of benefits they receive or the way in which they are paid as a result of the deal.

This tranche of the schemes liabilities was completed using an ‘umbrella contract’ which will provide an efficient basis for future transactions.

The scheme trustees were independently advised throughout the process by Lane Clark & Peacock LLP (LCP), and CMS Cameron McKenna Nabarro Olswang LLP (“CMS”) who provided legal advice.

Jamie Cole, Head of Bulk Purchase Annuity Origination at Aviva, said: “We are delighted to have completed this deal with Deutsche Bank, supporting them with the next tranche of their UK pension scheme de-risking strategy. We worked closely with all parties to create a bespoke arrangement for this transaction, one which will ensure we can fulfil future opportunities quickly and efficiently. This deal further demonstrates our appetite and ability to work with schemes of complexity and scale as they look to enter this market.”

Michael Wrobel, Chair of the Trustee Board, DB (UK) Pension Scheme, said: “We are very pleased to conclude this buy-in with Aviva. It is another significant step on our de-risking journey and the excellent outcome with Aviva reflects the expertise and collaborative approach of our advisers and our close working relationship with the Bank. The extensive work the Trustee, Bank and our advisers have undertaken to date means the Scheme is well positioned to take advantage of future opportunities to further de-risk as they arise.”

Jeremy Sowden, Head of Pensions and Benefits UKI, Deutsche Bank AG, added: “This latest transaction enables Deutsche Bank to hedge a material portion of the liabilities of Scheme, with the majority of pensions currently in payment now insured. It is another step on our ongoing journey to reduce risk in relation to our defined benefit pension obligations, benefitting the Scheme members, the Trustee Board and the Bank.

We were able to do so on mutually attractive terms, including comprehensive residual risks cover that further helps the Bank manage its risk exposure. We will continue to work closely with the Trustee Board to evaluate future de-risking opportunities.”

David Fink, Partner, LCP, added: “I am delighted that we could bring our experience to bear to help the Trustee and Deutsche Bank successfully continue their de-risking journey. We have worked closely with the Trustee and Deutsche Bank over a number of years to develop a phased buy-in strategy to reduce the Scheme’s risks over time. This further transaction gives the Scheme a strong platform to implement its strategy in what could be a very busy market over the next few years.”

Source: Aviva