Thomas Cook strikes £900m buy-in deal
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The Thomas Cook Pension Plan has completed a buy-in on 4 May 2023 with an initial premium payment of £900m, covering the benefits of more than 12,500 members. The transaction follows the travel firm’s collapse in 2019.
Aviva, the insurer that bought in the liabilities, will provide pension benefits at or in excess of Pension Protection Fund compensation levels, in view of a later buyout.
The Thomas Cook Pension Plan entered a PPF assessment period on 23 September 2019, as a result of the liquidation of Thomas Cook UK Travel Ltd. Aviva said no member would see any reduction in benefits.
"We're delighted to have entered into the buy-in policy with Aviva. This transaction will eventually see members receive benefits either at or, for many members, with an increase above PPF compensation levels,” said Steve Southern, a professional trustee at Vidett.
“We're pleased to share this positive news with members, who we know have had a difficult time over the last few years following the unfortunate liquidation of Thomas Cook.”
Dan Collins, relationship manager at the PPF, added: “We recognise that the last few years have been difficult for Thomas Cook scheme members so we are really pleased that the plan has now secured this buy-in, ensuring improved pension benefits for the majority of members. Our role is to support the members of the schemes we protect and we want to assure Thomas Cook scheme members of our continued support as this transition period develops.”
Jamie Cole, who heads up bulk purchase origination at Aviva, said: “This transaction is an important step as it provides security for all members and an uplift in benefits for many. The trustees' ambition is to complete the move to buyout as soon as possible and we look forward to welcoming the Plan members to Aviva once this is complete.”
The scheme trustees were advised by Barnett Waddingham and law firm Gowling WLG, while DLA Piper advised Aviva.
Open Trustees provided advice to the trustees throughout the PPF assessment period and buy-in process.
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