Case Study: Driving endgame for the Hays Pension Scheme
LawDeb’s Sean Burnard is Chair of Trustees for the Hays Pension Scheme. The Trustees were delighted to have agreed a buy-in with Pension Insurance Corporation (PIC) in 2024 to insure all the remaining benefits. PIC was selected on their strong track record and excellent customer service.
As a result of the buy-in, all the financial and demographic risks relating to the Scheme’s liabilities are now fully insured.
The Trustees’ key objectives were to transact with a financially secure counterparty, protect the long-term financial security of members’ benefits, secure benefits that match the benefit obligations and ensure members receive a good standard of administration.
LCP led the process with excellent support from Hogan Lovells, Mercer, Hymans Robertson and Equiniti. The co-operation and engagement of all parties was exceptional in helping the Trustee to navigate several factors to reach this great outcome for both Trustee & Company.
The aim was to complete the transaction in 2024. At the outset, this seemed a challenge but the collaborative effort of all involved meant that the transaction was completed mid-December.
The Trustee received good engagement from the market with 7 insurers quoting. Key to this was that the Trustees was well prepared to enter a transaction with good clean data and derisked assets that were buy-in ready.
The addition of good project management meant that good contractual terms were secured with attractive pricing for members.
The Company provided good support and commitment with an escrow facility in place to support the buy-in premium. The transaction eliminated pension related balance sheet volatility and is expected to have a materially positive impact on Group free cash flow which will support investment in growth and the return of excess capital to shareholders in the medium-term.
