Investment - Articles - Littlewoods Pensions completes buy in with Scottish Widows


The Trustee of the Littlewoods Pensions Scheme has purchased an £880m pensioner buy-in policy from Scottish Widows.

 The policy passes the risks associated with c60% of the liabilities in the Scheme to Scottish Widows and provides a monthly income to the Trustee to meet the pensions payable to nearly 7,000 members of the Scheme. The buy-in is Scottish Widows’ largest bulk annuity transaction to date.

 The buy-in is a key milestone for the Trustee and its sponsor, Shop Direct, a multi-brand online retailer. The Scheme already benefited from a strong funding position, having been an early mover to hedge its interest rate and inflation exposures, and the attractive pricing negotiated with Scottish Widows will improve the Scheme’s funding position further and reduce the downside risks faced by the Scheme.

 LCP was appointed to advise the Trustee on the planning, structuring and negotiation of the buy-in transaction. ARC Pensions Law provided legal advice to the Trustee whilst Scottish Widows were advised by Eversheds Sutherland.

 Colin Thwaite, Chairman of Trustees for the Scheme, said: "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.”

 Derek Harding, Shop Direct Finance Director, said: "We are extremely pleased with this buy-in with Scottish Widows, which protects the Scheme’s strong funding position. As sponsors of the Littlewoods Pensions Scheme, we are delighted to have locked in attractive market pricing for the benefit of the members and the employer. The Trustee have managed the investment strategy very successfully and the Scheme remains in a healthy surplus on a prudent self-sufficiency basis, making it one of the best funded DB schemes in the country."

 David Stewart, Partner at LCP, said: “Our role as specialist adviser is to get the focus of insurers who are choosing where to allocate their best pricing. We’re delighted to have helped the Littlewoods’ Trustee achieve excellent value by articulating clear transaction objectives to the insurers and executing quickly once these objectives were met. The pricing negotiated surpassed the Trustee’s original expectations and moves them significantly forwards towards full de-risking.”

 Emma Watkins, Bulk Annuity Director at Scottish Widows, said: "We are proud to have been chosen by the Trustee for this significant buy-in. Scottish Widows, the Trustee and their advisors have worked closely together to ensure the buy-in was implemented smoothly. Shop Direct is an important client of Scottish Widows’ parent Lloyds Banking Group which provides commercial banking services to the company. We are pleased to strengthen an existing relationship through this arrangement."
  

Back to Index


Similar News to this Story

SHEPS converts longevity swap into GBP750m buy in
The Scottish Hydro-Electric Pension Scheme (“SHEPS”) has completed a transaction to convert its longevity insurance into a buy-in contract with Pensio
Non life ILS capacity is at near record high
The value of non-life capacity issued and outstanding at the end of the third quarter was at a near-record high of $27.3 billion, exceeded only by the
Hermes calls for active stewardship transformation
The investment management industry is today falling short of its duty to create long-term, sustainable wealth and must now put active stewardship at t

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.