Staples UK pension scheme agrees £47m buy-in with L&G

The Universal Office Supplies Pension Scheme has agreed a £47m buy-in with Legal & General (L&G), covering over 175 deferred members and 85 retirees.

The scheme’s sponsoring employer is stationery and office supplies firm, Staples UK Limited.

The transaction was agreed as part of a collaborative sole insurer process following wider de-risking discussions with the trustee in relation to the scheme.

This allowed the trustees to split the buy-in into two parts to enable specific asset disinvestment timescales.

In October 2021 the first buy-in of £42m took place, followed by a further £5m buy-in in January 2022.

The transaction forms part of the sale of the wider company’s European business and the scheme trustee will now work with L&G towards a buyout within set timeframes.

Mercer and Shoosmiths advised the trustee on the deal, while Eversheds provided legal advice to L&G.

Linklaters partner, John Sheppard, and counsel, Alasdair Smith, provided legal advice to the sponsor.

“We are delighted to have secured member’s benefits in full as part of a transaction where speed was of execution was an important priority,” commented 20-20 Trustees trustee director, Nadeem Ladha.

“Together with L&G and our advisers, we worked closely with the company to provide the scheme with a bespoke solution to manage the illiquid assets as part of a process that moved at significant pace. We are grateful for the efforts of all stakeholders involved in this transaction.”

L&G Retirement Institutional head of client solutions, Frankie Borrell, added: “We remain committed to being a whole of market de-risking provider that delivers attractive solutions for pension schemes of all sizes.

“By working with us on a focused, sole insurer basis, the scheme was able to benefit from the increased flexibility of a two-stage transaction.

“We are delighted with the outcome that the scheme’s members will now have greater security for their retirement.”

Mercer principal and lead trustee adviser, Maurice Speer, said: “Following company restructuring, Mercer considered various options to achieve the trustee and company’s objectives of a full scheme buyout within a set timeframe.

“A two-part buy-in enabled the disinvestment of around £5m of illiquid assets, allowing the trustee to transact with an excellent price in a busy market, securing all members’ benefits in full. This was not just a broking process, Mercer devised a solution that worked for all parties.

“Once agreed, the transaction was agreed and delivered in very tight timescales that could not have been achieved without the close collaboration of all parties. The bulk annuity market finished strong in 2021, and we expect this to continue in 2022.”

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