1st June 2018 ARC advises on £880m pensions buy-in for client Littlewoods Pensions Scheme

ARC has acted for the Trustee of the Littlewoods Pensions Scheme in purchasing an £880m pensioner buy-in policy from Scottish Widows.

This is Scottish Widows’ largest bulk annuity transaction to date, and the second largest in the market this year.  The policy passes the risks associated with around 60% of the liabilities in the Scheme to Scottish Widows and provides a monthly income to the Trustee to meet the pensions payable to nearly 7,000 members of the Scheme.

The buy-in is a key milestone for the Trustee and its sponsor, Shop Direct, a multi-brand online retailer. The Scheme already benefited from a strong funding position, having been an early mover to hedge its interest rate and inflation exposures, and the attractive pricing from Scottish Widows will improve the Scheme’s funding position further.

As well as negotiating the contract, ARC’s role included preparing legal aspects of the invitation to insurers to tender, including analysing historic legal entitlements.

Anna Rogers, Senior Partner at ARC Pensions Law commented: “We are proud to have been part of this major deal, which was executed quickly to lock in attractive market pricing for the Scheme.”

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