Marks & Spencer adds £1.4bn in new buy-ins
On the go: Marks & Spencer's UK defined benefit scheme has entered a £1.4bn buy-in with the Pension Insurance Corporation and Phoenix Life, bringing its total insured portfolio up to two thirds of its pensioner population.
The £900m transaction with PIC is the largest bulk annuity deal confirmed this year, as the market looks forward to another bumper year.
M&S purchased its first two policies last year, also totalling £1.4bn, with Phoenix and Aviva. It announced at the the that the umbrella arrangement it had set up would allow it to transact quickly on new deals with a range of insurers.
Graham Oakley, chair of the £10bn Marks and Spencer Pension Trust, said: "We’re pleased to announce the purchase of these additional buy-in policies, which provide an important contribution to the trustee’s ongoing objective of reducing the longevity risk in the scheme to increase the security of all members’ pensions."
Alongside lead advisers LCP, the deal was advised on by law firm Linklaters and actuarial consultancy Hymans Robertson.
Richard Wellard, a partner at Hymans, said: “This will undoubtedly be one of many large buy-in transactions to complete this year.
"Setting a strategy and timing transactions in a way that works for both the company and the trustee is very important," he added. "Shared objectives, a collaborative approach and continual communication are so important in the derisking of large pension schemes. This a marathon, not a sprint.”