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Marks & Spencer completes £1.4bn pension buy-in with PIC, Phoenix Life

23rd May 2019 - Author: Luke Gallin

Marks & Spencer has secured two further pensioner buy-ins with Pension Insurance Corporation (PIC) and Phoenix Life totalling roughly £1.4 billion.

Longevity imageThe latest buy-in sees Marks & Spencer further de-risk its £10 billion defined benefits pension scheme. This £1.4 billion pension buy-in round, combined with two policies purchased in 2018, means that roughly two-thirds of the Scheme’s pensioner liabilities are now insured.

Marks & Spencer has been working with Hymans Roberts on the longevity de-risking strategy for the Scheme.

Richard Wellard, Partner, Hymans Roberts, 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. Shared objectives, a collaborative approach and continual communication are so important in the de-risking of large pension schemes. This a marathon, not a sprint.”

By completing buy-in transactions, Marks & Spencer reduces the risk that it will have to contribute additional funds to the Scheme in the future, and which also helps to ensure that Scheme members’ benefits are secure.

Marks & Spencer Group Treasurer, Joanna Hawkes, said: “Hymans Robertson has advised us since 2010 supporting the journey to a very strong position for our pension scheme. Their collaborative and pragmatic approach in advising us on our longevity risk strategy has helped us bring all stakeholders together for the completion of our second set of buy-in transactions.”

Chair of Marks & Spencer Pension Trust, Graham Oakley, added: “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.

“A collaborative approach with the Company together with efficient and effective advice continues to deliver well-executed and well-priced transactions.”

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