Mercer announces that it has acted as advisor to British American Tobacco (BAT) for the recently announced £3.4 billion buy-in with Pension Insurance Corporation in respect of BAT’s UK defined benefit (DB) pension fund. Mercer advised BAT on its overall pension de-risking strategy, which included an assessment of the various options available and the estimated financial impact of the buy-in transaction.
David Ellis, Partner at Mercer and advisor to BAT, said: “This major transaction is testament to what can be achieved through a proactive, well-planned and confident approach to managing pension risk. Mercer is proud to have partnered with BAT on its journey to reduce its exposure to risk from its defined benefit pension obligations.”
The UK pension risk transfer market continues to grow, with aggregate premiums paid to insurers for bulk annuities in the first six months of 2019 reaching approximately £15bn. This exceeds the aggregate premiums paid in any previous full year, except 2018 (£24bn for the full year). Mercer predicts UK pension risk transfer activity for the whole of 2019 to reach £35bn to £40bn of bulk annuities and longevity swaps, and £20bn to £30bn of individual member transfer payments.
Mercer delivers advice and technology-driven solutions that help organisations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 25,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a business of Marsh & McLennan Companies (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people with 76,000 colleagues and annualized revenue approaching $17 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer. In the UK, Mercer Limited is authorised and regulated by the Financial Conduct Authority.