Morrisons completes £270m buy-in and offers WULS
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The RSP Section of the Morrisons Retirement Saver Plan has entered a £270m buy-in, with a view to buying out and winding up. A winding-up lump sum exercise is currently underway.
The deal completed in March this year and is the third buy-in for Aviva with a scheme sponsored by Wm Morrison Supermarkets.
The latest transaction insures the benefits of over 32,000 deferred members of the company’s Cash Balance Plan. Aviva said it has also underwritten a winding-up lump sum exercise for about 30,000 members.
Winding-up lump sums are one-off payments that allow members to take their accumulated benefits as a lump sum instead of a regular retirement income. To be eligible for this WULS offer, a member’s benefits in the RSP Section must not be higher than £18,000. The offer is open for at least eight weeks, and Morrisons has created a dedicated website.
“Securing members’ benefits in full, while offering eligible members the option of a WULS, means we can provide both security and flexibility — an excellent outcome,” said trustee chair Steve Southern from trustee firm Vidett.
Sean Rooney, bulk purchase annuity deal manager at Aviva, said: “We’re pleased to have supported the trustees of the Morrisons Retirement Saver Plan with their plans to secure member benefits.”
Consultancy Aon led the transaction on behalf of the trustees, who received legal advice from Clifford Chance. Aviva was advised by law firm DLA Piper.
Senior partner at Aon, John Baines, said the transaction required “meticulous planning and creativity”, describing the scheme as “highly unusual”.
Baines said the chosen structure gives the trustee cost certainty and benefit flexibility to about 30,000 members.
The largest bulk annuities bought by the Morrisons pension trustees were with Rothesay in 2023. The buyout specialist was picked for a £1.4bn buy-in with Safeway Pension Scheme and a £762m buy-in with the 1967 Section of the Morrisons Retirement Saver Plan.
