Phoenix Group, the UK’s largest long-term savings and retirement business, today announces that it has completed a £360 million bulk purchase annuity with the Trustee of the Marks and Spencer Pension Scheme.
This buy-in marks the Scheme’s third transaction with Phoenix, securing a total of £1.3bn of liabilities and, alongside the transactions completed by the Scheme in 2018 and 2019, it increases insurance coverage to around 30% of the Scheme’s total pensioner liabilities.
The Trustee approached the market earlier in the year as market volatility presented a favourable pricing opportunity. The existing “umbrella contract*” structure between Phoenix and the Marks & Spencer Pension Scheme and the Trustee’s efficient decision-making framework enabled both parties to take advantage of the environment and move quickly.
Justin Grainger, Phoenix Group’s Head of Bulk Purchase Annuities, said: “We are delighted to continue to support the Marks and Spencer Pension Scheme on its long term de-risking journey. Today’s announcement builds on a relationship established in 2018 that has now secured £1.3bn of the Scheme’s liabilities. This latest transaction demonstrates how an umbrella contract structure can benefit all parties if trustees are set up to react to favourable pricing opportunities.”
The Trustee was advised by Lane Clark & Peacock (LCP), the lead adviser for the transaction, and Linklaters on legal matters.
Graham Oakley, Chair of the Marks and Spencer Pension Trust, said: “We’re pleased to announce the purchase of this additional buy-in policy, providing another important contribution to the Trustee’s ongoing objective of reducing the longevity risk in the Scheme to increase the security of all members’ pensions. Through a collaborative approach with the Company and our existing relationship with Phoenix, we were able to act quickly and benefit from the market opportunities seen during 2020 to complete a further well-priced transaction.”
Myles Pink, Partner at LCP, said: “The M&S Pension Scheme has been able to take a further step to remove longevity and other risks, building on the thorough preparatory work carried out for its previous buy-in transactions. The Scheme has again demonstrated how well-prepared pension schemes that are flexible in their approach and have umbrella terms in place can efficiently lock into market opportunities when they arise.”
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