Standard Life insures pub workers with £1.2bn buy-in
Pardon the Interruption
This article is just an example of the content available to mallowstreet members.
On average over 150 pieces of new content are published from across the industry per month on mallowstreet. Members get access to the latest developments, industry views and a range of in-depth research.
All the content on mallowstreet is accredited for CPD by the PMI and is available to trustees for free.
Standard Life has secured a £1.2bn bulk purchase annuity transaction with the Mitchells & Butlers Pension Plan in the form of a buy-in, covering around 20,200 deferred and pensioner members.
Mitchells & Butlers, whose brands include All Bar One, Harvester and O’Neill’s, runs more than 1,700 pubs, restaurants and bars across the UK.
Rhian Littlewood, senior business development manager at Standard Life, said the transaction marks “a significant milestone” for the plan in its derisking journey.
“Throughout the process, we worked closely with the trustees on a clear strategy and an innovative solution to help manage the sale of illiquid assets, which was crucial to the success of this transaction,” said Littlewood.
The bulk purchase annuity arrangement transacted in May.
XPS Pensions Group was the lead adviser to the trustees for this transaction, while legal advice was provided by Gowling WLG.
Jonathan Duck, chairman of the trustees of the Mitchells & Butlers Pension Plan, praised all the parties for having “great flexibility” in structuring the transaction in a way that a buy-in has been possible “several years earlier than anticipated”.
He said: “This is an excellent result for all plan members and for M&B plc, something that the trustees have worked hard to achieve over the years.”
M&B also has another pension plan – the Mitchells & Butlers Executive Pension Plan – which entered a £650m buy-in policy with Legal & General in December 2021.
Duck said: “Both the Mitchells & Butlers Pension Plan and Mitchells & Butlers Executive Pension Plan are now secured with buy-in policies, a great resolution to the historic challenge of past pension deficits.”
Jo Carter, risk settlement partner at XPS, argued the latest deal was “one of the most complex transactions in recent years”, which required significant planning and innovation from the XPS investment team to tackle the plan’s multiple illiquid asset holdings.
She added: “The work undertaken by the XPS administration team, from onboarding the administration in July 2022, has been fundamental to enable attractive pricing and a transfer of data and benefit risk to Standard Life from the point of buy-in.”
How far should insurers and pension funds plan ahead to successfully execute a large deal?
