Marks & Spencer has taken a further significant step in reducing the risks in its £11bn UK defined benefit pension scheme through two further buy-in policies with Aviva and Phoenix Life totalling broadly £750m.

Hymans Robertson has been working with Marks & Spencer on the de-risking strategy for the pension scheme, working collaboratively with the Trustee and its advisers. Combined with buy-in policies purchased in 2018 and 2019, 80% of the Scheme’s pensioner liabilities are now insured through a series of transactions totalling broadly £3.7bn. The strategic approach to risk management reduces the risk that Marks & Spencer will be required to contribute additional cash to the Scheme in future. This is a further step in the journey to ensuring that all members’ benefits are secured, while the risk to shareholders is carefully managed.

Richard Wellard, Partner, Hymans Robertson said:

“The Company and the Trustee were able to confidently undertake these transactions, despite the potential disruption from COVID-19, demonstrating that attractive terms can be secured where parties have the right governance and co-operation to act at the required pace. This is further evidence of the benefits of the steps undertaken in recent years to establish shared objectives and a collaborative approach to working. Setting a strategy and timing transactions in a way that works for both the Company and the Trustee remains very important.”

Daniel Brook, Group Treasurer, Marks and Spencer commented:

“With the support of Hymans Robertson we have successfully completed our third set of buy in transactions, helping us to continue reducing exposure to external factors and further increase the protection of our Scheme members’ benefits.”

Graham Oakley, Chair, Marks and Spencer Pension Trust commented:

“We’re pleased to announce the purchase of these additional buy-in policies, providing another important contribution to our ongoing objective of reducing risk in the Scheme to increase the security of all members’ pensions. The collaborative approach and our existing relationships have allowed us to act quickly and complete further well-priced transactions.”