Littlewoods Pensions Scheme has purchased a £880m buy-in policy from Scottish Widows, representing the insurers largest bulk annuity transaction to date.
The deal offloads the risks of 60% of Littlewoods’s pension liabilities to Scottish Widows and is aimed at helping the trustee to meet the pension payments to its 7000 scheme members. The DB scheme, which closed for further accrual in 2010, is sponsored by online retailer Shop Direct Group.
Colin Thwaite, chairman of Trustees for the Scheme, comments on the agreement: “We are delighted to have completed this buy-in transaction with Scottish Widows, covering well over half of our liabilities. The attractive pricing of the transaction has closed the gap to being fully funded and further reduces the risk profile of our investments to meet members’ pensions.”
David Stewart, partner at consultancy firm LCP, which advised the trustee on the planning of the transaction adds: “The pricing negotiated surpassed the Trustees’ original expectations and moves them significantly forwards towards full de-risking.”
The deal is Scottish Widows’ 17th bulk annuity arrangement, overall it is now responsible for securing the benefits of over 25,000 pension scheme members.
