BW advises on £850 million buy-ins for the Arcadia Group Pension Schemes

BW has advised the trustees on transactions to insure £850m of liabilities with Aviva, securing benefits for 8,800 members of the Arcadia Group and Arcadia Group Senior Executive Pension Schemes.

The schemes entered a Pension Protection Fund (PPF) assessment period on 30 November 2020 and BW was appointed to provide administration, actuarial, risk transfer and investment services.

Aviva was selected following a robust insurance market review, and a competitive and comprehensive selection process. The first important milestone of the deal, securing buy-ins with Aviva, was completed on 3 February 2023 with an initial premium payment of £850 million.

Members of the Arcadia Group Pension Scheme will receive the full scheme benefits they would have been entitled to if the insolvency and PPF assessment period had not taken place. 

For the Arcadia Group Senior Executive Pension Scheme, pensions have been secured at the level they would have been in 2022 if the insolvency and PPF assessment period had not happened. Further work is being carried out to determine the future level of pension increases for members of the Arcadia Group Senior Executives Pension Scheme and members will be updated at the earliest opportunity.

Rosie Fantom, Risk Transfer Partner, said: “It has been a privilege to work with the trustees on these transactions, which bring together the benefits of collaboration between all parties and running a well-structured approach to market. We are delighted to have gained excellent market traction, supported by considered preparations, which has contributed to reaching this milestone. 

"In the wake of increasing interest rates, the risk transfer market is busier than ever with excellent opportunities for schemes and sponsors to secure liabilities. We help our clients to identify transaction windows, prepare and structure robust market approaches to make the most of these opportunities. We look forward to leading other schemes to complete transactions, particularly for schemes in similar positions through our role on the PPF+ transaction advisory panel.”
 

Simon Bramwell, Risk Transfer Partner, said: "Reaching this significant milestone for the members is testimony to the hard work of the trustees and all the parties who have collaborated on the transaction. We are very pleased to have been involved in this important process for the schemes. Now we look forward to supporting the trustees in preparing the schemes for buy-out and continuing our work together to achieve innovative solutions and the best outcome for members."

Alda Andreotti, Chair of the Trustees, said: "This transaction is the result of our commitment to achieving the best outcome for members and I would like to thank all parties who collaborated with us. The professional advice we have received from Barnett Waddingham and our other advisers has been of the highest standard and we are very grateful for their support and guidance during this process."

Dan Collins, Relationship Manager at the PPF, said: "Our role is to provide reassurance and support to the members of the schemes we protect at a worrying time, and it is great to see such a positive outcome. Arcadia members can be assured of our continued support throughout this transition phase. Our sincere thanks to the trustees and their advisers for collaborating with us so effectively to achieve it."