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June 15, 2022

PIC concludes House of Fraser Pension Scheme buyout

Specialist insurer Pension Insurance Corporation (PIC) has closed a £600m ($731.4m) pension insurance buyout with the Trustee of the House of Fraser Beatties & Jenners Pension Scheme.

The deal covered 5,050 pensioners along with 3,850 deferred members.

This Scheme was created in 2013 with the combination of the House of Fraser Pension Plan, the James Beattie plc Pension Scheme and the Jenners Princes Street Edinburgh Limited Pension and Life Assurance Scheme 1974. 

Its main employer, House of Fraser (Stores) was liquidated in August 2018. Thereafter, the Scheme was being reviewed for inclusion in the Pension Protection Fund, a statutory UK fund aimed at protecting members if their defined benefits pension fund goes bankrupt.

The PIC deal was sealed after trustees decided that it would lead to the “best outcome” for members.

PIC head of Origination Structuring Uzma Nazir said: “The Trustee’s commitment to securing member pensions above PPF levels with the full member protection offered through the UK regulated insurance regime sets an example to others and we are delighted to partner with them.”

Scheme chairman Steve Sargent said that the PIC deal will offer members higher benefits than the PPF.

According to Sargent, the transaction will offer members long-term security as well as certainty for their benefits.

LCP advised the pension fund on the deal, while CMS offered legal advice. Herbert Smith Freehills served as the adviser for PIC. 

In a statement, the LCP said that the “terms negotiated by the Trustee will mean members whose pensions have been reduced as a result of the insolvency are expected to get an uplift to their pension.”  

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