LCP has advised the Trustee of the Marks & Spencer Pension Scheme (the Scheme) on the purchase of two further pensioner buy-in policies with Aviva and Phoenix Life totalling approximately £750m.

These transactions follow execution of two similar buy-ins in March 2018 with Aviva and Phoenix Life and two pensioner buy-ins in April 2019 with Phoenix Life and Pension Insurance Corporation. The six buy-ins completed to date cover c.£3.7bn of pensioner liabilities.

LCP’s role as execution adviser on all six of these transactions has been part of its wider appointment to advise the Trustee on its strategy to reduce the Scheme’s longevity risk. Linklaters provided legal advice for the transactions.

These buy-ins have been executed using transaction schedules to the umbrella master agreements that the Trustee had agreed with Aviva and Phoenix Life in 2018. The combination of the same clear decision-making framework adopted in previous transactions and the ability to execute in this way allowed the Trustee to move quickly to purchase additional buy-ins when pricing opportunities arose earlier this year.

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.”

Graham Oakley, Chair of the Trustee Board, commented “We’re pleased to announce the purchase of these additional buy-in policies, 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 relationships, we were able to act quickly and benefit from the market opportunities seen during 2020 to complete further well-priced transactions.”