The trustees of the South East Water Pension Scheme have secured the benefits of all their members following a second buy-in with Just.
The £120m deal covered the longevity risk of 1,000 members and follows a similar agreement between the two parties almost a decade ago.
“The de-risking process is now complete and the member benefits secured,” said Geraint Jones, Just’s business development manager.
Trustee chair Jo Stimpson added that this is the result of close collaboration between the trustees, the sponsor and their advisers.
“We are delighted to have completed the scheme’s final buy-in, marking the successful conclusion of a significant de-risking journey to enhance the long-term security of our members’ pensions,” she added.
Andrew Farmer, South East Water’s chief financial officer, said:“This milestone is the result of a well-executed strategy developed years ago and has been achieved through a strong partnership with the trustee, reinforcing our commitment to long-term certainty for both our pension scheme members and the company,” he added.
This latest buy-in, which was completed in December but has only now been publicised, involved non-standard pension increases and member options. These are said to be common features of the water industry and are difficult to insure.
This de-risking transaction was completed at the end of 2024, when Just set an industry record of closing 129 such deals in a calendar year. This came as some trustees took advantage of the gilt-driven rising surpluses within the defined benefit pensions industry to attract an insurer.
Indeed, last year was a record year for bulk annuity transactions.
The market was worth £47.6bn across almost 300 deals, well ahead of the 227 previous record set in 2023, according to Aon’s research.
In the second half of 2024 another record was achieved with 12 deals each worth more than £1bn were agreed.
New entrants to the market, including Royal London, M&G and Utmost, created greater capacity, while streamlining the process to de-risk smaller schemes was another factor behind the growth in volume. Indeed, 78% of transactions last year were for less than £100m.
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