£800m pensions buy-out completed for BHS defined benefit pension scheme

BHS2 pension scheme

The BHS2 Pension Scheme, the defined benefit (DB) pension scheme of retailer BHS, has been subject to a full pension insurance buy-out, covering £800 million of pension liabilities for the scheme’s 9,000 members.

The transaction, completed with the Pension Insurance Corporation (PIC), was viable due to the scheme’s trustees and advisers managing the scheme’s assets, monitoring the scheme’s funding level and implementing a bulk annuity to fully secure the BHS2 Pension Scheme’s pension obligations. Members are now PIC policyholders and are guaranteed to receive their pension benefit.

Chris Martin, managing director at Independent Trustee Services, said: “It has always been our goal to deliver the best possible outcome for the members of this scheme. A buy-out guarantees member benefits under the BHS2 Scheme, and is the most secure solution for the members of the scheme. I am delighted that we have been able to accomplish this transaction far earlier than expected.”

The BHS2 Pension Scheme was set up in 2017 following the collapse of BHS and a cash injection by its former owner Sir Philip Green. The DB scheme covers members who chose to transfer from two predecessor BHS Pension Schemes, rather than those who opted to transfer into the Pension Protection Fund (PPF). Some eligible members with small pensions also chose to take a lump sum in lieu of their pension.

The buy-out transaction was advised by consultancies Barnett Waddingham and Willis Towers Watson, as well as law firm Eversheds Sutherland.