Just Retirement has completed its largest bulk annuity deal to date, a buy-in deal offering to pay the pension income of an undisclosed defined benefit pension scheme for £75m.
In a stock exchange announcement today (14 October), the specialist annuity provider stated that until all the scheme’s members have been informed of the particulars of the transaction, further details will not be disclosed.
However, Just Retirement said it can confirm it is providing a bulk annuity contract to the scheme trustees to cover all the income needs of all pensioner members. This is also Just Retirement’s first completed transaction with the employee benefit consultant advising on the scheme.
Following the deal, Rodney Cook, chief executive of Just Retirement, said the provider was on course to meet expectations for full year sales.
Earlier this month Just Retirement revealed it cut 90 roles and scrapped a planned salary review for all employees as part of a £14m cost reduction plan that was announced in the wake of the Budget.
Mr Cook said: “This time we are disclosing a scheme which is twice the size of our previous largest deal. While this is lumpy business, at present the team is delivering strong momentum.
“Although only a short time has passed since the chancellor’s announcement proposing reforms to the tax treatment of unused DC pension savings on death, there has been no impact on our subsequent trading in the IUA segment.
“Our average case size of £57,000 means that many of our retired customers are not caught by inheritance tax, or even income tax, but they do want a guaranteed lifetime income. Intermediaries are continuing to seek out the better rates we can offer due to our medical underwriting.
“Our progress in DB, the lack of disruption following the recent tax proposals, and HM Treasury’s subsequent clarification that value protected annuities will not suffer any tax disadvantage relative to drawdown all underpin my confidence that we will meet our expectations for full year sales.”
Bulk annuity deals have been touted as a potential area of growth for individual annuity providers that are losing sales after the budget pensions tax shake-up.
Major providers such as Legal and General, Prudential as well as specialists such as Partnership and Just Retirement said to be seeking to do more business in the sector.
