Royal London has sold its defined benefit administration business to XPS Pensions Group for £4.8m.
In a market update published today (May 1), the mutual insurer stated the transaction was subject to certain conditions being met, but was expected to complete this month.
The subsidiary, RL Corporate Pension Services, also provides actuarial and consulting services, catering for 150 smaller final salary schemes, which cover 8,000 members.
According to XPS, the total business being acquired includes contracts already in the name of RLCPS, contracts to be fulfilled under an outsourcing agreement with Royal London, and 46 members of staff required to fulfil these contracts.
The combined business had gross assets of £0.7m at the end of last year, with revenues of £3.9m.
XPS stated the transaction will strengthen the company’s marketshare in providing full services to smaller DB pension schemes, and would enhance its presence in the Scottish market.
RLCPS's 46 staff members are expected to transfer to XPS's Edinburgh office in the months following the closing of the acquisition.
According to Paul Cuff, co-chief executive of XPS Pensions Group, this acquisition is consistent with the company’s "strategic focus on becoming the pre-eminent pensions consultancy in the UK" and improves its capability and offering to smaller pension schemes.
He said: "We see this as particularly important, given the increasing need for smaller pension schemes to have access to high quality advice and technology enabled solutions in a cost-effective way. We welcome our new clients and our new colleagues to our business."