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Pension Funds

Marks and Spencer completes pension buy-ins covering £1.4 billion in liabilities

Marks and Spencer PLC, London, completed about 1.4 billion ($1.9 billion) in buy-in deals with Aviva and Phoenix Life for its Marks and Spencer Pension Scheme.

The 10 billion defined benefit fund was frozen in 2017.

The buy-in covers about one-third of retiree liabilities, said a spokesman for Lane Clark & Peacock, which advised the pension trustees. He said the buy-in with Aviva covered 925 million, and 470 million was secured with Phoenix Life.

A spokeswoman for Hymans Robertson, the corporate advisers to Marks and Spencer, added this was the first risk transfer for the pension fund.

"We are delighted to have secured these insurance policies for a significant portion of the benefits payable to our members," said Simon Lee, chief investment officer of the Marks and Spencer Pension Scheme, in a news release by LCP. "We were able to do so at attractive pricing and on favorable terms through significant competitive tension and a process ... that has now positioned the (fund) to execute efficiently with these and other insurers in the future."

A spokeswoman for the trustee of the pension fund added in an email that it will continue to pursue opportunities that further protect the security of benefits. The trustee "will take such steps if it believes it is in members' interests to do so based on professional advice and taking account of market conditions and pricing at the time."