Bulk Purchase Annuity secures the benefits of over 14,000 pensioner members and 11,000 deferred members
Standard Life, part of Phoenix Group, has successfully concluded a £1.5bn Bulk Purchase Annuity (“BPA”) transaction with the Compass Group Pension Plan (the “Plan”). The sponsoring employer, Compass Group PLC (the “Company”), is a global leader in food services.
This bulk purchase annuity arrangement, which transacted in December 2024, is a buy-in for the majority of the Plan’s members, securing the benefits of over 14,000 pensioner members and over 11,000 deferred members. The Trustee, Company and advisers worked closely with Standard Life to secure the buy-in and meet their agreed objectives, significantly reducing risk exposure for the Plan.
Mercer were lead broker on the project and transaction adviser to the Trustee, as well as providing additional actuarial advice. The Trustee was also supported by Eversheds Sutherland who provided legal advice and Aon who provided investment advice. XPS are the Plan’s administrator. LCP was lead transaction adviser to the Company and provided actuarial and strategic advice. Freshfields provided legal advice to the Company.
Kieran Mistry, Director of Defined Benefit Solutions at Standard Life, part of Phoenix Group Said: We are delighted to have supported the Trustee and Company in securing the benefits of over 25,000 members. This transaction demonstrates the value of careful and thorough preparation. The Plan came to market with clear requirements, allowing us to focus on delivering solutions which meet the Trustee and Company’s de-risking objectives. It was great to work with the Plan’s advisers throughout the process, culminating in a smooth and efficient execution.
Philip Whittome, Chair of Trustee Board and Professional Trustee at Capital Cranfield said: This transaction represents a significant milestone and is the culmination of a multi-year journey by the Trustee to improve the security of members’ benefits. Thank you to the Company, who we have worked with collaboratively throughout this time to achieve a mutually beneficial outcome for members and the sponsor. Mercer led a well-structured process and negotiated attractive pricing and terms to help us achieve our goals. This project has involved a massive effort from all advisers including Eversheds Sutherland, Aon and XPS who supported the Trustee alongside Mercer.
Jim McInally, Group Reward Director at Compass Group PLC said: The Company wishes to thank the Trustee and all of the advisers for their support in ensuring that the Plan was well positioned which enabled the insurers to offer attractive pricing and terms. We are supportive of the Trustee’s actions. These reduce the risk exposure of the Plan and enhance the security of members’ benefits. LCP and Freshfields provided the Company with invaluable support and advice throughout the process to ensure that the optimal solution was implemented as intended.
Andrew Ward, Partner at Mercer said: We are excited to have led on this significant transaction. From the outset, the Trustee followed a robust process which has resulted in a superb outcome for the Plan members with the Trustee’s objective of providing long term financial security being achieved. The project has been underpinned by great collaboration with the Company which has contributed to the overall success of the project.
Myles Pink, Partner at LCP said: Working with our client and Freshfields, we helped the Company to consider the optimal strategy and transaction structure and to then support the Trustee’s execution of the buy-in. Implementing this solution and achieving a terrific result would not have been possible had it not been for the collaborative working between the Trustee, Company and all advisers
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