Investment - Articles - Marks and Spencer complete second round of pensioner buy ins

Marks & Spencer has taken another important step in reducing the risks in its £10bn UK defined benefit pension scheme. Marks & Spencer has now secured two further buy-in policies with Pension Insurance Corporation (PIC) and Phoenix Life totalling broadly £1.4bn.

 Hymans Robertson has been working with Marks & Spencer on the longevity de-risking strategy for the pension scheme. Together with the two policies purchased in 2018, approximately two thirds of the Scheme’s pensioner liabilities are now insured. Through a close working relationship with the Trustee and its advisers, the strategic approach to longevity de-risking further reduces the risk that Marks & Spencer will be required to contribute additional cash to the Scheme in future. This is another step in the journey to ensuring that all members’ benefits are secured, while the risk to shareholders is minimised.

 Richard Wellard, Partner, Hymans Robertson 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.”

 Joanna Hawkes, Group Treasurer, Marks and Spencer commented: “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.”

 Graham Oakley, Chair, Marks and Spencer Pension Trust commented: “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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