The trustees of the Thomas Cook Pension Plan have agreed a buy-in deal worth £900m with Aviva Life & Pensions UK Limited, securing pension benefits for more than 12,500 members.
Aviva was selected following a robust insurance market review and competitive and comprehensive selection process, it announced.
The firm will provide plan members with pension benefits at or in excess of Pension Protection Fund (PPF) compensation levels, it added.
The buy-in and eventual buyout with Aviva will ultimately result in a better outcome for the vast majority of members than they might have been expecting. No member will see any reduction in benefits, said Steve Southern of professional trustees firm Vidett.
He added: “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.”
Jamie Cole, head of bulk purchase origination at Aviva, said the transaction was 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 buyout as soon as possible and we look forward to welcoming the plan members to Aviva once this is complete,” Cole said.
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.”
The trustees were advised by Barnett Waddingham, actuarial investment and risk transfer advisers for the plan. Gowling WLG provided legal advice to the plan, while DLA Piper 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.