The Universal Office Supplies Pension Scheme, the sponsor of which was Staples UK, has agreed a pensions buy-in worth approximately £47m with Legal and General Assurance Society (Legal and General).
Staples UK was previously a provider of office supplies, which sold its UK division to Hilco Capital in 2016, and entered into administration in 2018. This transaction forms part of the sale of the wider group's European business.
The buy-in was agreed as part of a collaborative sole insurer process, following wider de-risking discussions with the trustee of the Staples UK pension scheme.
The transaction was split into two parts in order to accommodate specific asset disinvestment timescales, with the first £42m buy-in taking place in October 2021, and the final £5m in January 2022.
Frankie Borrell, head of client solutions at Legal and General Retirement Institutional, said: “By working with us on a focused, sole insurer basis, the scheme was able to benefit from the increased flexibility of a two-stage transaction. We are delighted with the outcome that the scheme’s members will now have greater security for their retirement.”
Nadeem Ladha, trustee director at 20-20 Trustees, said: “We are delighted to have secured members' benefits in full as part of a transaction where speed of execution was an important priority.
"Together with Legal and General and our advisers, we worked closely with the company to provide the scheme with a bespoke solution to manage the illiquid assets as part of a process that moved at significant pace. We are grateful for the efforts of all stakeholders involved in this transaction.”
Maurice Speer, principal and lead trustee adviser at Mercer, added: “Following company restructuring, Mercer considered various options to achieve the trustee and company’s objectives of a full scheme buyout within a set timeframe.
"A two-part buy-in enabled the disinvestment of around £5m of illiquid assets, allowing the Trustee to transact with an excellent price in a busy market, securing all members’ benefits in full. This was not just a broking process, Mercer devised a solution that worked for all parties.
"Once agreed, the transaction was agreed and delivered in very tight timescales that could not have been achieved without the close collaboration of all parties. The bulk annuity market finished strong in 2021, and we expect this to continue in 2022.”
