The trustees of the Thomas Cook Pension Plan have secured a £900m buy-in with Aviva, providing pension benefits at or in excess of Pension Protection Fund (PPF) levels for the scheme’s more than 12,500 members.

The deal completed yesterday (4 May 2023) with an initial premium payment of £900m.

The buy-in and eventual buyout is expected to result in a better outcome for the vast majority of members than they may have expected after the liquidation of Thomas Cook, with no members to see any reduction in benefits.

Scheme trustees, Vidett (formerly 2020 Pension Services Limited) and Stuart Benson Pension Trustees Limited, were advised throughout the process by Barnett Waddingham, while Gowling WLG provided legal advice.

The trustees also received advice and support throughout the PPF assessment period and buy-in process from Open Trustees Limited, as well as support and guidance from the PPF itself throughout the process.

The scheme first entered a PPF assessment period on 23 September 2019 after the Thomas Cook ceased trading, with members' benefits adjusted to PPF compensation levels with effect from this date.

The scheme is now expected to exit the PPF assessment period "soon", with a buyout with Aviva expected to complete in the first half of 2025 once the plan has received all monies due to it from Thomas Cook's liquidation.

Commenting on the news, Vidett trustee director, Steve Southern, stated: "We're delighted to have entered into the buy-in policy with Aviva.

"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.

"The PPF provides a valuable safety net and a significant level of protection but many members will now receive higher benefits than they might have expected because of the transaction with Aviva.

"Members can take comfort their benefits will be looked after by one of the UK’s leading insurance, wealth & retirement businesses. The trustees are pleased with this development and are very grateful to their advisers and the PPF for their help and commitment throughout this process."

Aviva head of bulk purchase origination, Jamie Cole, also highlighted the deal as an "important step", providing security for all members and an uplift in benefits for many.

“We’re delighted to support the trustees of the Thomas Cook Pension Plan with their objectives," Cole continued. "The trustees' ambition is to complete the move to buy-out as soon as possible and we look forward to welcoming the plan members to Aviva once this is complete”.

Adding to this, PPF relationship manager, Dan Collins, stated: “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.

"We’d like to thank the trustees and their advisors for working closely with us to achieve this positive outcome.”

Also commenting on the deal, Barnett Waddingham partner and lead advisor on the transaction, Richard Gibson, said: “Barnett Waddingham’s specialist risk transfer team has helped the trustees of the Thomas Cook Pension Plan to assess how they could best provide value and security to members following the liquidation of Thomas Cook.

"We were pleased to help the trustees agree a deal with Aviva after a competitive process, which will improve the benefits that many members receive.”

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