The ASDA Group Pension Scheme today announced its £3.8bn full scheme buy-in with Rothesay Life. PwC is pleased to have advised Walmart and ASDA in this landmark transaction, working over a number of months to reach the outcome where all 12,300 members of the scheme now have their benefits insured in full with Rothesay Life.
This is one of the largest pension scheme buy-ins in history and is a momentous achievement for all parties. PwC acted as lead strategic advisor on the design and implementation of the transaction to ASDA and its US parent Walmart. This involved the implementation of innovative solutions to ensure that the buy-in was secured in the timescales required, providing a broad spectrum of advice including:
Identifying and negotiating a suitable insurance transaction in the busiest market ever, for a pension scheme heavily weighted towards younger pre-retired members
Support in agreeing how to structure the one-off Company contribution to enable the transaction to complete
Supporting the scheme in selling illiquid assets to fund the buyout
Tax and accounting advice in the US and the UK
The buy-in has been secured in anticipation of a full ‘buy-out’ of the scheme which is expected to be completed in late 2020 or early 2021. Through the buy-out process members of the scheme will be provided with individual annuity policies issued by Rothesay Life, which will then be responsible for paying members' benefits in full.
Ben Stone, head of pensions risk transfer at PwC, said:
“Securing a deal of this size and complexity in a market that has been so busy in the last few months is a great result for ASDA, Walmart, the trustees and the pension scheme members.
“We were delighted to support ASDA and Walmart, bringing our buyout market expertise into negotiations and planning, while implementing solutions to ensure the scheme was prepared to transact as quickly as possible.
“It shows the importance of a strategic and well-run process, with collaboration between all stakeholders to achieve the desired outcome.”
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