Marks and Spencer completes two pension buy-in transactions worth £750m

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Marks and Spencer has completed two pensions buy-in transactions worth approximately £750 million for its defined benefit (DB) pension scheme.

The move, which follows two previous buy-in transactions completed in 2018 and 2019, means that 80% of the scheme’s pensioner liabilities are now insured. The buy-in policies are provided by Aviva and Phoenix Life, while Marks and Spencer was advised by Hymans Robertson and LCP.

Following the latest transactions, Aviva will insure the DB pension liabilities of a further 2,293 pensioner members, effectively removing the investment and longevity risk from the scheme. Members will not see any change in the amount they are paid or the way in which they receive their benefits.

The retailer’s move to secure its DB pension reduces the risk that it will be required to contribute additional cash to the scheme in the future, while securing members’ benefits and managing any risk to shareholders.

Graham Oakley, chair of the Marks and Spencer Pension Trust, said: “We’re pleased to announce the purchase of these additional buy-in policies, providing another important contribution to our ongoing objective of reducing risk in the scheme to increase the security of all members’ pensions. The collaborative approach and our existing relationships have allowed us to act quickly and complete further well-priced transactions.”