The National Grid UK Pension Scheme has completed a £900m buy-in with Rothesay, securing the benefits of 7,130 pensioners and their dependants.

This transaction is the third buy-in the scheme has completed with Rothesay, following an £800m buy-in in 2020 and a £2.8bn buy-in in 2019, taking the scheme’s total liabilities de-risked with Rothesay to £4.5bn.

This is addition to a£1.6bn buy-in with Legal & General in 2019, which covered around 6,000 members of section B of the National Grid scheme.

As the pensioners covered by the transaction included both recent retirees and pensioners who had been in payment for several years, Rothesay’s asset management team were requiered to source both longer- and shorter-dated assets to support the nature of the scheme’s pension liabilities now secured.

Aon acted as the lead risk transfer adviser on the deal, while Rothesay received legal advice from CMS, and Sackers provided legal advice to the trustee.

Meanwhile, the trustee received actuarial and investment advice, as well as executive and governance support, from LCP.

Commenting on the deal, Independent Governance Group (IGG) professional trustee and chair of trustees, Chris Martin, said: “Having taken on the position of chair of the scheme after the first two buy-ins, the board and National Grid completed a review of our shared strategic direction and concluded that it was appropriate to continue to de-risk the scheme and further enhance the security of our members.”

Martin said that it is “pleasing” to have completed the buy-in, through the hard work of all parties and their advisers and stated that the scheme’s “longstanding” relationship with Rothesay supported the “smooth and efficient” execution of this latest transaction.

Rothesay business development, Roisin O’Shea, said the company are “delighted” to work in partnership with the scheme again to insure a further 7,130 pensioners and their dependants.

Adding to this, Aon partner, Mike Edwards, said that it “carefully” designed this transaction to meet the objectives of the trustee and National Grid, while Rothesay provided the level of flexibility needed to meet the scheme’s requirements.

“It is a competitive de-risking market for both schemes and insurers right now, and to achieve such a positive outcome via an innovative transaction required a high degree of collaboration between all parties – Rothesay, the scheme and advisers,” Edwards said.

LCP partner, Jonathan Camfield, said the outcome of the transaction is “really positive” for members of the scheme, and that it has been “great to see everyone working together to achieve this”.

Sackers partner, Ralph McClelland, echoed this sentiment: “It has been a pleasure working with the trustee, Rothesay, National Grid and the capable team of advisors in what has been a collaborative and highly professional transaction.”

McClelland added that Sackers are also “confident” this most recent transaction delivers on the trustee’s long-term goal of securing a “safe and resilient” outcome for the scheme’s membership.

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