Reuters Pension Fund, Sheffield, England, insured £625 million ($795 million) in liabilities through a buy-in with Canada Life Financial Corp., said a spokesman at Aon, adviser on the deal.
The buy-in was the first risk transfer deal for the £2.3 billion pension fund and the largest so far by Canada Life. Law firm Sacker & Partners and consultant Redington also advised on the deal, which covers the majority of retirees' liabilities.
The key rationale for the transaction was to achieve further risk reduction to reduce longevity risk, according to Hannah Cook, senior consultant and actuary at Aon.
The trustees are looking to carry out further transactions as part of a long-term derisking framework, Ms. Cook added.
"This transaction has led to a major improvement to the security of our members' pensions by taking a significant amount of risk out of the scheme. We are grateful for the excellent advisory support provided by Aon, Sackers and Redington to work collaboratively and complete this transaction in such a short timescale. I would also like to acknowledge the positive sponsor support from Blackstone and Thomson Reuters," Greg Meekings, chairman of trustees for the Reuters Pension Fund, said in a news release.
Blackstone Group agreed to acquire a majority stake in Thomson Reuters in January 2018 alongside the C$368.3 billion ($276.3 billion) Canada Pension Plan Investment Board, Toronto, and Singapore's sovereign wealth fund GIC.