The Littlewoods Pension Scheme has today completed a huge £880m bulk annuity deal with insurer Scottish Widows.
The move will pass 60 per cent of the scheme's liabilities to Scottish Widows, who will provide a monthly income to the trustee to meet the pensions payable to its 7,000 members.
It marks Scottish Widow's largest bulk annuity transaction to date, and a key milestone for Littlewoods and its sponsor Shop Direct.
Littlewoods say that the "attractive pricing" negotiated with Scottish Widows will further improve the scheme's funding position and reduce the risk attached to it.
Colin Thwaite, chairman of trustees for the scheme, said: "We are delighted to have completed this buy-in transaction with Scottish Widows, covering well over half of our liabilities.
"The attractive pricing of the transaction has closed the gap to being fully funded and further reduces the risk profile of our investments to meet members’ pensions."
Lane Clark & Peacock (LPC) was appointed trustee on the planning, structuring and negotiation of the buy-in transaction.
ARC Pensions Law provided legal advice to the trustee while Scottish Widows were advised by Eversheds Sutherland.
Emma Watkins, bulk annuity director at Scottish Widows, said:
Shop Direct is an important client of Scottish Widows’ parent Lloyds Banking Group which provides commercial banking services to the company. We are pleased to strengthen an existing relationship through this arrangement."