OUR UNIQUE CASE STUDY
Western Pension Solutions was founded on the unique case of the Western United Group Pension Scheme, which went from deficit to full all-risks buy-out without any financial contribution from the company.
The Western United Group Pension Scheme was the legacy defined benefit scheme for the Vestey Group and its various associated employers. Over 40 years, the Scheme incorporated more than 200 employers that made up the Vestey Group’s corporate history.
By September 2012, the Scheme had liabilities valued more than £500m (which was several times larger than the net assets of the business) and a funding deficit of more than £75m on a buy-out basis.
In a series of tactical steps between November 2012 and June 2014, the Scheme achieved a full buy-out with a UK regulated insurance company, which:
- Covered “all risks”
- Included £10m of benefit improvements
- Provided £20m of surplus to distribute to members
- Required no contribution from the Sponsor (and all expenses paid)
- Returned surplus to the Company to meet future expenses
how it was done
how it was done
Whilst the series of transactions that led to the buy-out happened over a short period, our success was based on years of careful preparation combined with structures and processes that allowed us to react quickly and decisively to market opportunities. This involved:
- Setting a clear strategy around a single objective to de-risk and building consensus among key stakeholders.
- Having in place a governance structure and process that allowed us to capture good news on the Scheme’s investments and react to market opportunities in the bulk annuity market.
- Choosing the right professional advisers that were capable and committed to helping us achieve our objective.
- Thorough data preparation and responsible use of liability management exercises to release value in the way we delivered benefits to members.
- Direct engagement with insurers to source the best deals and demonstrate our commitment to transact if our targets were met.
