Pension Insurance Corporation plc (PIC), the specialist insurer of defined benefit pension funds, concluded, in November 2023, full scheme buy-ins with the Trustees of three defined benefit pension schemes formerly sponsored by Thomas Cook Group, totalling £50 million.
According to the announcement, the Thomas Cook Travel Schemes entered Pension Protection Fund (PPF) assessment in September 2019 following the liquidation of the Thomas Cook Group.
From what we understand, the buy-ins secure the liabilities of 520 members across the schemes to receive benefits at,
or above PPF compensation levels.
However, it is important to note, that the exact outcome for each member will not be known until the buyouts occur.
PIC explained that this is expected to happen during 2024, due to further work being required for each scheme before they can be fully transferred to the company.
Moreover, PIC stated that the process is expected to be completed towards the end of 2024, once the schemes have received all monies due to them from the group’s liquidation.
Once all that happens, the members will then come out of the PPF and become direct PIC policyholders.
The schemes will continue to be protected by the PPF during the buy-in period, PIC noted.
“We are delighted to have entered into these buy-in policies with PIC. The insurance market is extremely busy at the current time and it can be very challenging to secure member benefits for smaller schemes. It has been a long process but PIC has offered us the opportunity to ensure that the Schemes’ members receive benefits greater than what they would have received from the PPF,” commented Jonathan Hazlett, Managing Director of Open Trustees who acted as sole trustee to the Schemes.
“Many much larger schemes are now seeking to de-risk this year, so demonstrating that PIC is interested in the whole buyout market and has the adaptability and scale to accommodate all sizes of deal is important to us. Open Trustees have now been able to completely de-risk these three Schemes, providing greater security to the members,” said Tristan Walker-Buckton, Co-Head of Origination at PIC.
