Aviva completes £900m bulk annuity deal with Thomas Cook

Aviva has completed¹ a £900million bulk annuity buy-in transaction with the Trustees of the Thomas Cook Pension Plan (the Plan).

Aviva will insure the defined benefit pension liabilities for more than 12,500 members, providing pension benefits at or in excess of Pension Protection Fund (PPF) compensation levels. The buy-in and eventual buy-out will result in a better outcome for the vast majority of members than they may have expected after the liquidation of Thomas Cook.  No member will see any reduction in benefits.

The scheme Trustees were independently advised throughout the process by Barnett Waddingham LLP, actuarial investment and risk transfer advisers for the Plan. Gowling WLG LLP provided legal advice to the Plan. DLA Piper LLP advised Aviva. Open Trustees Limited provided advice and support to the Plan trustees throughout the PPF assessment period and buy-in process. The Trustees have also received support and guidance from the PPF throughout this process.

Jamie Cole, Head of Bulk Purchase Origination at Aviva said:

“We’re delighted to support the Trustees of the Thomas Cook Pension Plan with their objectives. This transaction is an important step as it provides security for all members and an uplift in benefits for many. The Trustees' ambition is to complete the move to buy-out as soon as possible and we look forward to welcoming the Plan members to Aviva once this is complete”.

Steve Southern of Vidett (formerly 2020 Pension Services Limited) said:

"We're delighted to have entered into the buy-in policy with Aviva. This transaction will eventually see members receive benefits either at or, for many members, with an increase above PPF compensation levels. We're pleased to share this positive news with members, who we know have had a difficult time over the last few years following the unfortunate liquidation of Thomas Cook. The PPF provides a valuable safety net and a significant level of protection but many members will now receive higher benefits than they might have expected because of the transaction with Aviva. Members can take comfort their benefits will be looked after by one of the UK’s leading insurance, wealth & retirement businesses. The Trustees are pleased with this development and are very grateful to their advisers and the PPF for their help and commitment throughout this process."

Dan Collins, Relationship Manager at the PPF said:

“We recognise that the last few years have been difficult for Thomas Cook scheme members so we are really pleased that the Plan has now secured this buy-in, ensuring improved pension benefits for the majority of members. Our role is to support the members of the schemes we protect and we want to assure Thomas Cook scheme members of our continued support as this transition period develops. We’d like to thank the Trustees and their advisors for working closely with us to achieve this positive outcome.”

Richard Gibson, Partner at Barnett Waddingham and lead advisor on the transaction said:

“Barnett Waddingham’s specialist risk transfer team has helped the Trustees of the Thomas Cook Pension Plan to assess how they could best provide value and security to members following the liquidation of Thomas Cook.  We were pleased to help the Trustees agree a deal with Aviva after a competitive process, which will improve the benefits that many members receive.”

-ENDS-

Sources

¹ Deal completed May 2023

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