Roadchef and Canada Life strike £24m deal in buy-in agreement

The £24m Full Scheme Buy-In Deal: A Win for Roadchef Retirement Benefits Scheme

Background

The Roadchef Retirement Benefits Scheme recently announced a significant milestone with the completion of a £24m full scheme buy-in deal with Canada Life in July 2023. This deal covers all 547 pensioner and deferred members of the scheme and marks Canada Life’s second full scheme buy-in following its initial undisclosed scheme announced last month. The transaction was led by Lane Clark & Peacock (LCP), utilizing their streamlined buy-in and buyout service. Legal advice was provided by Gowling WLG, while EY advised Roadchef on the deal, and Eversheds assisted Canada Life throughout the process.

The Success of LCP’s Streamlined Approach

The streamlined buy-in service offered by LCP played a crucial role in facilitating a competitive process among multiple insurers, ultimately leading to the successful completion of the deal. Mark Fletcher, the trustee chair of the Roadchef scheme, acknowledged the effectiveness of LCP’s service, commending its ability to maximize insurer engagement and secure competitive pricing and contract terms within a busy marketplace. James Muirhead, the group chief financial officer of Roadchef, also expressed satisfaction with the outcome, highlighting LCP’s streamlined approach as a key factor in achieving the scheme’s long-standing goal at an affordable price.

The Significance of Strong Insurer Engagement

Catherine Hopper, a partner at LCP, emphasized the value of the strong insurer engagement that their streamlined process continues to attract. Contrary to the belief that exclusive market approaches are necessary for transactions of this magnitude, LCP’s approach yielded multiple competitive quotes, benefiting both Roadchef and its members. This success demonstrates that even smaller schemes can garner strong insurer engagement and attractive terms through LCP’s streamlined service, as exemplified by the Roadchef scheme.

Canada Life’s Commitment to the Market

Tim Coulson, the managing director of bulk purchase annuities at Canada Life, expressed delight in completing the full scheme buy-in transaction for Roadchef, marking their second transaction in the deferred market. Coulson also emphasized Canada Life’s dedication to developing their capabilities in this exciting and growing market, ensuring their participation in a wide range of opportunities.

Editorial and Analysis

This £24m full scheme buy-in deal is undoubtedly a positive development for the Roadchef Retirement Benefits Scheme and its members. The successful completion of this transaction reflects the effectiveness of LCP’s streamlined approach, which achieved strong insurer engagement and competitive pricing. The involvement of Canada Life as the insurer signifies their commitment to the market and highlights the opportunities available for even the smallest schemes.

The Power of Streamlining

The streamlined approach employed by LCP is worth noting as it offers multiple benefits for both pension schemes and insurers. By creating a competitive environment that allows multiple insurers to quote, it maximizes engagement and generates attractive terms. This is particularly significant for smaller schemes that might not have considered such options before. LCP’s success in this transaction demonstrates that exclusivity is not the only viable path and that streamlined services can deliver excellent outcomes.

The Promise of Canada Life

Canada Life’s involvement in the full scheme buy-in deal with Roadchef further solidifies its position as a key player in the market. With their commitment to developing their capabilities and participating in a wide range of opportunities, it is clear that they are dedicated to serving pension schemes and providing attractive options for retirees. This bodes well for future transactions and opens up possibilities for other schemes seeking similar arrangements.

Advice for Pension Schemes

This successful deal serves as a valuable lesson for pension schemes looking to secure full scheme buy-ins or similar transactions. Consider working with reputable consultants such as LCP, who have a proven track record in facilitating streamlined processes that attract strong insurer engagement. Engaging multiple insurers in a competitive environment can lead to more favorable pricing and contractual terms, even for smaller schemes.

Furthermore, it is worth exploring opportunities with insurers like Canada Life, who have demonstrated their commitment to the market and their willingness to consider schemes of various sizes. The expanding market for bulk purchase annuities creates room for negotiation and potentially attractive options for pension schemes and their members.

In conclusion, the Roadchef Retirement Benefits Scheme’s £24m full scheme buy-in deal with Canada Life represents a significant achievement. The streamlined approach adopted by LCP, attracting strong insurer engagement, and the commitment of Canada Life to the market demonstrate the potential for favorable outcomes in similar transactions. Pension schemes should take note of these successful strategies and seek the expertise of reputable consultants to navigate the evolving landscape and secure the best deals for their members.