Cancer Research UK Completes £280m Buy-In Deal with Standard Life
Cancer Research UK has successfully completed a £280 million buy-in with Standard Life, covering approximately 2,800 members of its defined benefit pension scheme. This deal, which was finalized in March, addresses more than half of the Cancer Research UK Pension Scheme’s total liabilities, which were valued at £402.5 million as of March 31, 2024, according to the charity’s most recent annual report.
Roger Cooper, a director at Pi Partnership and chair of the Cancer Research UK Pension Scheme’s trustee board, expressed his satisfaction with the transaction, noting that both the charity and the trustees had set a goal to complete a full buy-in by 2032. He stated, “I am delighted that, with the support of our advisers and the backing of the charity, the trustee board has achieved this major step towards the eventual winding-up of the scheme ahead of its original target.”
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The Strategic Move Towards Pension Scheme Closure
The buy-in marks a significant move towards the full de-risking of the scheme, providing certainty to its members and securing their benefits for the future. With the backing of Standard Life, the deal has been a vital part of the charity’s plan to reduce financial exposure and ensure its pensioners’ security. This step is part of a long-term strategy that aims to complete the closure of the scheme well ahead of the initial 2032 target date.
Bespoke Bulk Annuity Proposal
Alex Oakley, the bulk annuity transaction manager at Standard Life, explained that the insurer collaborated closely with the pension scheme’s adviser, Mercer, to create a “bespoke” bulk annuity proposal. This proposal was tailored to meet the unique needs of the scheme and the trustees. “This was supported by the scheme itself, which had undertaken careful preparation before the transaction, and had a clear set of objectives which meant our team could focus on their priorities and efficiently secure member benefits,” Oakley said.
Strategic Selection Process
Maurice Speer, a partner in Mercer’s risk transfer team, highlighted the importance of the preparation process. “With such high demand from insurers for this scheme, we shortlisted insurers from the outset based on specifically defined selection criteria,” Speer said. One of the key factors in the selection process was the insurers’ environmental, social, and governance (ESG) credentials. Additionally, their ability to offer complex benefits and provide a positive experience for members after the buy-in was also a major consideration.
As the bulk annuity market grows, Speer noted that establishing clear selection criteria from the beginning has become even more important. The Cancer Research UK Pension Scheme is a signatory to the Sustainability Principles Charter for bulk annuity providers, which was launched in January 2024, further highlighting its commitment to responsible investment practices.
Support from Advisors and Legal Counsel
LCP provided investment advice throughout the process, while Sackers served as the legal adviser to the pension scheme. Their expertise helped to ensure that the transaction met the specific needs of the scheme and that all legal requirements were met.
A Partnership with a Charitable Focus
In addition to the financial aspects of the deal, Standard Life has a close relationship with Cancer Research UK. The insurer is the headline sponsor of the charity’s Race for Life event series. Standard Life staff have participated in over 1,500 events, raising £200,000 for Cancer Research UK in the process. This partnership underscores Standard Life’s commitment to supporting the charity’s broader mission, in addition to their work with the pension scheme.
Looking Forward
This £280 million buy-in represents a major milestone for Cancer Research UK in securing its pension obligations. It provides the charity with greater financial stability and demonstrates the effectiveness of strategic planning in managing pension liabilities. With the support of trusted partners like Standard Life and Mercer, Cancer Research UK is on track to meet its long-term pension goals, ensuring that its members receive the benefits they deserve.
As the charity moves closer to achieving its full buy-in goal, this transaction serves as a model for other organizations looking to de-risk their pension schemes and provide financial certainty for their members.
