Aviva wins bulk annuity deal with M&S pension scheme

Published: 17 May 2018

Aviva has completed a £925 million bulk purchase annuity transaction with the Trustee of the Marks and Spencer Pension Scheme.

This buy-in transaction represents Aviva’s largest bulk annuity deal to date, covering the liabilities for a proportion of the Scheme’s retired members. It builds on the important wider existing corporate relationship that Aviva already has with Marks and Spencer, for which it provides health and general insurance along with travel insurance for its retail banking customers.

Members will see no change in the amount of benefits or the way in which they are paid as a result of the transaction. It establishes a framework for further, longer term de-risking via the ‘umbrella’ structure now in place.

Last year, Aviva identified bulk annuities as a significant growth opportunity for its UK and Irish businesses and is well-placed to grow in both markets due to its investment capabilities and strong balance sheet. Over the last six months Aviva has expanded its bulk annuity team adding over 30 people, as it competes for larger bulk annuity transactions.

We’re delighted that the Marks and Spencer Pension Scheme has chosen us to insure a proportion of the pension benefits of its members. Not only does this latest deal build on the great relationship we already have with Marks and Spencer but as our largest bulk annuity deal to date, it also perfectly demonstrates our increased appetite for bigger deals. As the UK’s largest multi-line insurer, we’re in a pretty unique position as a provider as we can offer our clients a whole range of insurance products and our customers really appreciate the simplicity this provides.

Tom Ground, managing director of defined benefit solutions at Aviva

Graham Oakley, Chairman of the Marks and Spencer Pension Trust, said: “The Scheme’s strong funding position has allowed the Trustee to follow a strategy of reducing risk by aligning investments more closely with the pension benefits we will need to pay to members. This bulk purchase annuity is a significant step in reducing longevity risk being managed by the Trustee, providing additional security for all members’ benefits.”

The competitive bidding process to select an insurer and negotiate terms was led by LCP on behalf of the Trustee.

In October 2017, Aviva announced the completion of what was, until now, its largest bulk annuity deal to date - a £600 million pensioner buy-in with The Pearson Pension Plan. 

ENDS

Media Enquiries - Aviva Press Office:

Katy Hurren 
katy.hurren@aviva.com  
07800 692548 
@Katy_Hurren

Notes to editors:

  • We are the UK's leading diversified insurer and we operate in the UK, Ireland and Canada. We also have international investments in India and China.
  • We help our 19.6 million (as at 31 August 2024) customers make the most out of life, plan for the future, and have the confidence that if things go wrong we’ll be there to put it right.
  • We have been taking care of people for more than 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2023, we paid £25.6 billion in claims and benefits to our customers.
  • In 2021, we announced our ambition to become Net Zero by 2040, the first major insurance company in the world to do so. We are aiming to have Net Zero carbon emissions from Aviva’s operations and supply chain by 2030. While we are working towards our sustainability ambitions, we recognise that while we have control over Aviva’s operations and influence on our supply chain, when it comes to decarbonising the economy in which we operate and invest, Aviva is one part of a far larger global ecosystem. There are also limits to our ability to influence other organisations and governments. Nevertheless, we remain focused on the task and are committed to playing our part in the collective effort to enable the global transition. Find out more about our climate goals at at www.aviva.com/sustainability/climate and our sustainability ambition and action at www.aviva.com/sustainability.
  • Aviva is a Living Wage, Living Pension and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at https://www.aviva.com/about-us/our-people/
  • As at 30 June 2024, total Group assets under management at Aviva Group were £398 billion and our estimated Solvency II shareholder capital surplus as at 30 September 2024 was £7.6 billion. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
  • For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us
  • The Aviva newsroom at www.aviva.com/newsroom includes links to our spokespeople images, podcasts, research reports and our news release archive. Sign up to get the latest news from Aviva by email.
  • You can follow us on:
  • For the latest corporate films from around our business, subscribe to our YouTube channel: www.youtube.com/user/aviva

      Read more about our life and pensions business