Food services company Compass Group has secured the “majority” of its defined benefit (DB) scheme’s membership through a £1.5bn bulk annuity deal with Standard Life.
The buy-in covers 14,000 pensioner members and 11,000 deferred members of the Compass Group Pension Plan.
Philip Whittome, a professional trustee at Capital Cranfield and chair of the pension scheme’s trustee board, said: “This transaction represents a significant milestone and is the culmination of a multi-year journey by the trustee board 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.”
Whittome added that Mercer, the lead adviser and broker for the transaction, had helped with a “well-structured process and negotiated attractive pricing and terms to help us achieve our goals”.
Jim McInally, group reward director at Compass Group, said the buy-in had reduced the pension scheme’s risk exposure and enhanced the security of members’ benefits.
The deal was completed in December and is one of several £1bn-plus buy-ins announced in the second half of 2024, including transactions involving G4S, National Grid, Deutsche Bank, RAC and NatWest.
Kieran Mistry, director of DB solutions at Standard Life, said the Compass Group Pension Plan had come to the bulk annuity market with “clear requirements, allowing us to focus on delivering solutions which meet the trustee and company’s de-risking objectives”.
Consultancy group LCP has forecast another bumper year for bulk annuities in 2025, with the total volume expected to reach £40bn to £50bn.
