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College of Law completes £28m pensioner buy-in

23 May 2017

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The College of Law Pension and Assurance Scheme has completed a £28million pension buy-in with Aviva.

The College of Law scheme, the scheme for the University of Law, is administered by the Legal Education Foundation and has 760 members.

This latest transaction covers employees who have retired since 2012, when the most recent previous buy-in was carried out.

It is the fourth buy-in the scheme has completed, having previously completed two buy-ins with Aviva.

It means almost all its current pensioners are now covered by bulk annuities, contributing towards the scheme trustees' long-term aim of achieving a full-scheme buy-out.

Scheme trustees will also transfer the payroll for the pensioners covered by the buy-in to Aviva, to realise efficiencies in the administration of the Scheme.

The buy-in transaction was combined with a review of the scheme's investment strategy, demonstrating that it is possible to reduce the level of investment risk at the same time as carrying out a buy-in.

By shifting some of their return seeking assets into the low risk portfolio, scheme trustees say they have captured the benefits of the strong current funding level.

Scheme trustee Alan Humphreys said: "We are delighted to have completed our fourth pensioner buy-in, taking another important step to materially reduce risk for the members of the scheme."

Hymans Robertson was the lead advisor, with legal advice provided by Linklaters.

James Mullins, partner and head of risk transfer solutions, Hymans Robertson, said: "The strategy the trustees have adopted, of insuring their pensioners in groups over time as they retire when they can afford to do so, has become increasingly recognised as the optimal way of working to insure all benefits.

"We expect to see more pension schemes adopt this approach in future, with an increasing number of schemes now targeting buy-out as their final destination."

First published 23.05.2017

Lindsay.sharman@wilmingtonplc.com