Manchester-based Co-operative Bank announced on Tuesday the completion of a “buy-in” transaction of the segregated section of the Co-operative Pension Scheme (Pace) sponsored by the bank.

“The trustee of Pace has now successfully completed a full ‘buy-in’ transaction of the Bank Section, through which Pace has purchased a bulk annuity insurance policy, covering all liabilities required to meet future defined benefit pensions for the Bank Section and delivering greater security to its members,” said Co-operative Bank. 

“The insurance policy has been purchased using existing assets held within the Bank Section, without the need for the bank to make any additional contributions, and it is now expected that £52.5m of funding commitments, anticipated within current guidance to be fulfilled in 2024, will no longer be required.”

On Monday, Co-operative Bank had announced it set a strategy “to simplify and transform its balance sheet and reduce risk and uncertainty.” 

Co-operative Bank CEO Nick Slape said on Monday: “The bank is supportive of the strong stewardship and de-risking actions planned by the Trustee, which we expect would deliver a positive outcome for members, through offering enhanced protection of benefits. 

“It would also reduce the Bank’s exposure to the primary risks arising from the Bank Section of Pace, delivering value to our shareholders, further simplifying our business and preparing the Bank for the next phase of our strategy. 

“I am delighted that all parties have worked co-operatively to reach this point.”