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UK Bulk Purchase Annuity (BPA) Transaction Timeline & Process

Overview

A UK Bulk Purchase Annuity (BPA) transaction typically takes 12–24 months, involving risk transfer from pension schemes to insurers. Below is a phase-by-phase breakdown.

Key Phases

Phase	Timeline	Activities
1. Pre-Transaction Preparation	3–6 months	Trustee/adviser alignment Data clean-up Insurer shortlisting
2. Due Diligence & Pricing	3–9 months	Data pack preparation Risk modeling & pricing
3. Transaction Structuring	2–4 months	Heads of terms agreement Collateral arrangements
4. Legal Documentation	2–3 months	Annuity policy drafting Solvency II compliance
5. Approvals & Closing	4–8 months	Trustee/insurer sign-off Premium transfer Member communication

UK-Specific Factors

Data Quality: Major driver of delays (clean data required by insurers)
Regulatory Oversight: PRA (solvency) and FCA (conduct)
Collateral: Escrow accounts/letters of credit during interim periods
Competitive Tender: Common for medium/large schemes

Timeline by Deal Size

Deal Size	Timeline	Complexity Drivers
Small (£100m–£500m)	12–18 months	Single insurer, streamlined data
Medium (£500m–£1bn)	18–24 months	Collateral negotiations, complex benefits
Large (>£1bn)	18–24+ months	Multi-insurer tender, regulatory scrutiny

Example: £750m DB Scheme

Data clean-up: 4 months
Tender process: 3 months
Legal/regulatory: 4 months
Closing: 1 month

Total timeline: ~12–14 months (with good data)

Recent Trends

High insurer demand lengthening timelines (2023–2024)
ESG/climate risk considerations
LDI hedge unwinding requirements