LCP advises on £1.5bn buy-in between Compass Group Pension Plan and Standard Life

Standard Life, part of Phoenix Group, has successfully concluded a £1.5bn Bulk Purchase Annuity (“BPA”) transaction with the Compass Group Pension Plan (the “Plan”). The sponsoring employer, Compass Group PLC (the “Company”), is a global leader in food services.

This bulk purchase annuity arrangement, which transacted in December 2024, is a buy-in for the majority of the Plan’s members, securing the benefits of over 14,000 pensioner members and over 11,000 deferred members. The Trustee, Company and advisers worked closely with Standard Life to secure the buy-in and meet their agreed objectives, significantly reducing risk exposure for the Plan.

Mercer were lead broker on the project and transaction adviser to the Trustee, as well as providing additional actuarial advice. The Trustee was also supported by Eversheds Sutherland who provided legal advice and Aon who provided investment advice. XPS are the Plan’s administrator. LCP was lead transaction adviser to the Company and provided actuarial and strategic advice. Freshfields provided legal advice to the Company.

Myles Pink, Partner at LCP, commented: “Working with our client and Freshfields, we helped the Company to consider the optimal strategy and transaction structure and to then support the Trustee’s execution of the buy-in. Implementing this solution and achieving a terrific result would not have been possible had it not been for the collaborative working between the Trustee, Company and all advisers”.

Jim McInally, Group Reward Director at Compass Group PLC, commented: “The Company wishes to thank the Trustee and all of the advisers for their support in ensuring that the Plan was well positioned which enabled the insurers to offer attractive pricing and terms. We are supportive of the Trustee’s actions. These reduce the risk exposure of the Plan and enhance the security of members’ benefits. LCP and Freshfields provided the Company with invaluable support and advice throughout the process to ensure that the optimal solution was implemented as intended.”