WH Smith Pension Trust has completed a £1bn full scheme buy-in with Standard Life, insuring the liabilities of 12,950 members.

The bulk purchase annuity arrangement was completed in August and secures the benefits of all members of the trust.

LCP acted as the lead adviser for the deal, while legal advice was provided by Mayer Brown and CMS.

The transaction was completed without the need for WH Smith to make any additional contributions and follows a period during which the trustee reduced investment, interest rate and inflation risks within the trust.

Due to this risk removal, WH Smith will not be required to make any future contributions into the trust regarding defined benefit liabilities.

WH Smith Pension Trustees chairman, Jeremy Stone, commented: “This represents the fulfilment of a strategy that the trustee and corporate sponsor started out on nearly 20 years ago.

“Our joint focus on de-risking and improving funding eventually led to the point where we were in a position to transact with Standard Life, to secure the benefits of all members.

“Our advisers (LCP, Mayer Brown, CMS and Redington) worked collaboratively with one another and with our in-house administration team to prepare thoroughly for this transaction.

“That meant we could respond confidently and quickly to an attractive price put forward by Standard Life. They in turn, were accommodating of our contractual needs, provided a valuable price lock in volatile markets and were easy to work with throughout the process.

“We started working with Redington in early 2019, and their advice on the trust's de-risking journey and work on streamlining the trust's very complex and illiquid LDI portfolio has been invaluable in helping us reach our target of a full scheme buy-in 3 years ahead of plan.

"In particular, the framework we had in place helped add enormous value through the credit market volatility in 2020, and were able to fully disinvest our buy and maintain credit portfolio at the end of 2022 enabling us to approach the insurance market in the best possible shape to transact.”

Standard Life business development manager, Rhian Littlewood, added: “This is a significant deal for Standard Life and reinforces our ongoing commitment to the bulk purchase annuity market, supporting trustees with their de-risking requirements and helping ensure the security of members’ benefits.

“A collaborative approach between Standard Life and the trust’s advisers enabled the transaction to be completed more quickly than expected – an excellent result for the trust and its 13,000 members.

“By successfully de-risking the trust, security has been provided for all its members who can be confident in the future of their benefits. We are delighted to have been able to play such a key role in the trust’s de-risking journey.”

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