Sackers advises CDC Group on innovative DB pension scheme ‘buy-in’

Sacker & Partners, the UK’s leading pensions law firm, has advised the Trustees of the CDC Group Pension Scheme on a transaction that will see Rothesay Life insure benefits for all scheme members under a c.£370m buy-in arrangement. Assets will remain in the scheme as collateral, a rarity for pension scheme buy-in agreements.

CDC Pensions Scheme is the defined benefit scheme of CDC Group plc, the UK’s Development Finance Institution.

Paul Phillips, Partner at Sackers said: “The Trustees and CDC had a shared objective of managing risk – in particular longevity and investment – whilst not creating undue credit risk for either the Scheme or the employer.  Recent market conditions for buy-ins have resulted in the Trustees, CDC and Rothesay with all their professional advisers having to be innovative to develop a solution that meets all the objectives.”

Nicholas Selbie, Chairman of the Trustees, said “The Trustees, in conjunction with their advisers, and following a lengthy selection process, were attracted by the innovative, secure solution proposed by Rothesay Life.”

The collateral will be invested in a portfolio of corporate bonds from which the returns will be paid to Rothesay Life, the Goldman Sachs owned insurance company. In exchange, Rothesay Life will meet the liabilities of the scheme. 

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