Britax Childcare Group has taken a significant step in de-risking its defined benefit (DB) pension exposure after completing a deal with Just to insure 70 per cent of the liabilities across three separate DB schemes.
The GBP30 million buy-in transaction, completed in June 2021, insures most pensioner liabilities for the Group’s two larger schemes and all of the liabilities of its small scheme.
Following a competitive quotation process, the deal was achieved without additional contribution from the sponsor and will enable the small Lloyds Garage Pension Scheme to be wound up, an outcome that had for a long time been impractical.
Overall, the transaction covers around 300 members and after a full detailed strategy process to make the schemes buyout ready, the deal was taken from final competitive quotes to transaction in just 11 working days.
All three schemes – the Britax Childcare Limited Pension Fund, the Jessups Group of Companies Pension and Life Assurance Plan (1973), and the Lloyds Garage Pension Scheme – are looked after by a single trustee board who were advised throughout the process by Broadstone and Gateley Legal.
The Trustee noted that preparation was crucial to the deal with early work on data and benefit specifications allowing the transaction to progress quickly and smoothly.
Chair of the Trustee, Stephanie Gardiner, says: ‘We are delighted to have completed this transaction with Just to secure such a large proportion of the schemes’ liabilities, achieving significant risk reduction to the benefit of our members and the employer. This represents the successful culmination of a long term project, and the Trustee has greatly valued the support of our advisers, particularly Broadstone in preparing us for and helping us complete the deal, coordinating and collaborating with all the parties involved.’
Nigel Jones, Head of Consultancy and Actuarial at Broadstone, adds: ‘It is fantastic news that we have been able to assist the Trustee and Just to achieve this result. With our continued growth and increasing demand from our schemes for bespoke insurance solutions, we expect our specialist risk transfer team to be completing more of these transactions over the coming months. Our newly-developed Sirius solution will also offer invaluable assistance in transaction timing and cost efficiency.’
Martin Parker, Business Development Manager at Just Group, adds: ‘It is a great result to have completed this unique transaction, the first time Just has been involved in transacting across three schemes simultaneously. The schemes were well prepared which allowed us to quickly move to transacting and we’re really pleased to have provided this security for the scheme members, employer and Trustee.’