The trustee of the Arcadia Group and Arcadia Group Senior Executive Pension Schemes has agreed an £850m buy-in with Aviva, securing benefits in excess of Pension Protection Fund (PPF) levels for 8,800 members.

Aviva was selected following a "competitive and comprehensive" selection process, run on behalf of the trustees by Barnett Waddingham, with Gowling WLG providing advice.

Under the buy-in, Aviva will provide members of the Arcadia Group Pension Scheme with the full scheme benefits that they would have been entitled to if the insolvency and PPF assessment period had not taken place.

For the Arcadia Group Senior Executive Pension Scheme, meanwhile, pensions have been secured at the level they would have been in 2022 if the insolvency and PPF assessment period had not happened.

However, further work is still being carried out to determine the future level of pension increases for members of the Arcadia Group Senior Executives Pension Scheme.

Arcadia's defined benefit (DB) schemes initially entered PPF assessment in December 2020 after the Arcadia Group's insolvency, although the scheme trustees had since suggested that the schemes could manage to avoid falling under the remit of the PPF after trustees managed to accumulate £173m from the sale of assets.

Chair of trustees, Alda Andreotti, highlighted the news of the buy-in as a "positive development" for members, confirming that the trustees will now turn focus to preparing the schemes for buyout.

Andreotti stated: “This transaction is the result of our commitment to achieving the best outcome for members and I would like to thank all parties who collaborated with us.

"This includes our professional advisers, The Pensions Regulator (TPR) and the PPF who have offered their guidance, support and reassuring protection to the schemes during these challenging times.

“The trustees are extremely pleased with this substantial development and we have already updated members directly on what the buy-in means for them. Our hard work will now continue to maximise the benefits for all members and prepare the schemes for buyout.”

TPR executive director of frontline regulation, Nicola Parish, also welcomed the news of the buy-in, stating that "the arrangement should bring peace of mind to members".

“This outcome shows why we worked closely with the scheme trustees, their advisers and the PPF, as well as the corporate side, to secure protection for the schemes, as part of the company voluntary arrangement (CVA) in 2019," she stated.

"We are pleased this has made a significant contribution to the schemes now being funded above PPF levels.”

PPF relationship manager, Dan Collins, agreed that it is "great to see such a positive outcome", stating that "Arcadia members can be assured of our continued support throughout this transition phase".

Adding to this, Aviva head of bulk purchase annuity origination, Jamie Cole, stated: “We are delighted to be securing the benefits of more than 8,000 members of the two schemes, providing security for members, and we look forward to welcoming them as Aviva customers once the buyout is complete.

"The trustees’ goal of securing the best outcome for members and strong collaboration between parties helped achieve a smooth transaction.”

Barnett Waddingham risk transfer partner, Simon Bramwell, also highlighted the buy-in as a "significant milestone for the members", as well as a "testimony to the hard work of the trustees and all the parties who have collaborated on the transaction".

"We are very pleased to have been involved in this important process for the schemes," he continued.

"Now we look forward to supporting the trustees in preparing the schemes for buyout and continuing our work together to achieve innovative solutions and the best outcome for members.”


This article first appeared on our sister title, Pensions Age.

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