Securing full scheme buy-in – SA Brain & Company

The Challenge

• SA Brain & Company is one of Wales’ leading breweries, with its founder’s family still forming part of the shareholder base.
• Following the pandemic, the company faced significant challenges. The Trustees were concerned regarding the security of over 600 members of the S.A. Brain and the Crown Buckley Limited Pension Schemes.
• The Trustees were keen to improve security for members through a combination of de-risking, additional contributions and security over Company properties.
• The Company appointed Isio to support them through the funding and long-term strategy negotiations and help the Company achieve two key objectives:
  • The long-term survival of the business as a sustainable brewery
  • That members received benefits in full

Our Thinking

• Once appointed, we worked closely with the Company to understand their needs and objectives.
• We considered solutions that improved security for both Trustees and members, without putting the Company under further financial strain.
• There was a limited source of capital to develop the solution, primarily from funds already held in an escrow (following a sale of another part of the business)
• As insurance was not immediately affordable for the Schemes, we explored alternative solutions, such as a Capital-Backed Journey Plan, which would improve security for members and reduce volatility for the Company.
• However, following the LDI crisis in September 2022, the Schemes’ funding positions improved significantly making insurance achievable.

Our Solution

• All stakeholders and advisers worked collaboratively to prepare Scheme information to share with insurers and seek a quote.
• In early December the Company received a transactable quote from Just Group to fully buy-in the two Schemes
• The Schemes had some illiquid assets and so we had to work closely with the Company, the Trustee, their advisers and Just Group to find a solution to this potential barrier.
• We worked closely with Just Group, Quantum Advisory, Gowling LLP, Travers Smith and Independence Governance Group throughout the process.

Results

• Full buy-ins were achieved for both Schemes (c. £70m total liability)
• The transaction provided improved security to all members
• The transaction enabled the Company to demonstrate less risk of future pension funding requirements to lenders.    
• ‘Brains’ are now able to focus on the business’s future.
• Their CEO was recently interviewed by the BBC on challenges he has faced – read the article here.