Phoenix Group enters buy-in agreement with its own pension scheme

The Pearl Scheme has entered into an agreement with its principal employer Pearl Group Holdings No. 2 Limited, a Phoenix Group company, to complete a series of pension buy-ins.

Phoenix Group’s 2020 Annual Financial Results report revealed that the series of buy-ins are scheduled to be completed by 31 December 2023.

Simultaneously, the Pearl Scheme completing the first buy-in with Phoenix Life Limited (PLL), covering 25 per cent (£750m) of the scheme’s pensioner and deferred member liabilities, effective from 30 September 2020.

The scheme transferred £731m of assets of PLL, which constituted the payment of £735m of premium to PLL and a £4m payment from PLL to the scheme in respect of benefits for October and November 2020.

The value of the insurance policy at 30 September 2020 was £604m and at 31 December 2020 was £596m.

This agreement replaces the previous 2021 Pensions Agreement, and includes provisions for payments by Pearl Group to the scheme if it does not meet the minimum buy-in completion schedule.

The scheme’s last triennial valuation, as at 30 June 2018, showed a surplus of £104m.

It comprises a final salary section, a money purchase section and a hybrid section, and is closed to new members and as no active members.

Phoenix Group has four main pension schemes: Pearl Group Staff Pension Scheme, the PGL Pension Scheme, the Abbey Life Staff Pension Scheme and the ReAssure Staff Pension Scheme. 

Commenting on the report, Phoenix group CEO, Andy Briggs, said: "2020 was a landmark year for Phoenix during which we completed the acquisition of ReAssure and became the UK's largest long-term savings and retirement business.

“We delivered record cash generation of £1.7bn, our solvency balance sheet remained resilient, we delivered our highest ever year of open business growth, and we have recommended a 3 per cent increase in our 2020 final dividend.

“We are led by our purpose of 'helping people secure a life of possibilities' to deliver for all of our stakeholders and are putting sustainability at the heart of our business. During the year we have focused on delivering better outcomes for our customers, investing in our people, supporting our local communities, and have made a commitment to be net-zero carbon across our operations by 2025 and our investment portfolio by 2050.

“Covid-19 has challenged each and every one of us and I am very grateful for the outstanding dedication and professionalism of my colleagues which ensured we protected our customers throughout.

“Looking ahead to 2021, we will continue to optimise our in-force heritage business for cash and resilience, while the recent acquisition of the Standard Life brand will support us in accelerating our open business growth strategy."

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