BHS Senior Management Scheme, London, completed a £2.5 million ($3 million) bulk annuity transaction with Legal & General Assurance Society, insuring the remaining participants in the beleaguered retailer's retirement plans.
British Home Stores became insolvent in April 2016. The firm sponsored two pension funds, the £95.1 million Senior Management Scheme and the £421 million BHS Pension Scheme.
In 2017, the BHS2 Pension Scheme was set up to house most of the liabilities of the two pension funds. BHS2 completed an £800 million buyout with Pension Insurance Corp. in 2018, covering all liabilities of the new pension fund, while participants that remained in the BHS Senior Management Scheme and the BHS Pension Scheme entered the assessment period for entry into the £36 billion Pension Protection Fund, London. The PPF is the lifeboat fund for plans of insolvent U.K. companies.
The BHS Senior Management Scheme has just over £2.5 million in assets left, said Rhys Mellens, associate director at Willis Towers Watson, adviser to the pension fund trustees.
With the deal, the pension fund exits the assessment period and participant benefits have been secured in excess of those that would have been paid by the PPF. The deal marks the pension fund's first buy-in, Mr. Mellens said. Information on the BHS Pension Scheme could not immediately be learned.
"Despite its small size, the transaction was particularly innovative, and I would like to thank Legal & General for their support. I'd also like to thank our co-trustees along with our advisers, Willis Towers Watson, Eversheds Sutherland and Barnett Waddingham, for their help through the whole process." said Chris Martin, chairman of the trustee, Independent Trustee Services, in an L&G news release.