The Hays Pension Scheme, sponsored by recruitment and workforce solutions provider Hays Group plc, has concluded a £370m buy-in bulk purchase annuity transaction with Pension Investment Corporation.
The buy-in covers 853 pensioners and dependents and 3,368 deferred members, and Hays supported the transaction with a c.£13m upfront cash contribution.
As a result of the buy-in, all the financial and demographic risks relating to the scheme’s liabilities are now fully insured.
“Following constructive and collaborative dialogue with the Scheme trustee, we are pleased to fulfil our longstanding ambition to achieve full buy-in of the Hays Pension Scheme, fully insuring the Scheme liabilities with a cost-effective approach that benefits all stakeholders,” said James Hilton, Hays Chief Financial Officer.
“From a Hays perspective, the transaction eliminates pension related balance sheet volatility and is expected to have a materially positive impact on group free cash flow from FY26F. Our structurally improved cash generation will support investment in growth and the return of excess capital to shareholders in the medium-term.”
“The buy-in transaction has helped us meet our objective of securing the pensions of all members of the Scheme. We are delighted to have partnered with PIC who were selected on their strong track record and excellent customer service. Being well prepared with good project management means we have secured good contractual terms with attractive pricing for our members. LCP led the process with excellent support from Hogan Lovells, Mercer and Hymans Robertson. The co-operation and engagement of all parties was exceptional in helping the Trustee to navigate a number of factors to reach this great outcome for both Trustee and Company,” said Sean Burnard, Director at The Law Debenture Pension Trustee Corporation plc and Chair of Trustees of the Hays Pension Scheme.
LCP acted as lead transaction adviser. The scheme received legal advice from Hogan Lovells International LLP, actuarial advice from Hymans Robertson and investment advice from Mercer. The Company received legal advice from Slaughter and May. PIC received legal advice from Addleshaw Goddard LLP.
“We are extremely pleased to have helped the Trustees of the Hays Pension Scheme to reach this significant milestone. Being well prepared and having a clear set of objectives allowed us to deliver a tailored solution the Scheme. It was a pleasure working with the Scheme and their advisors, who ran a smooth and efficient process,” said Deepash Amin, Head of New Business Strategy at PIC.
“We are delighted to have supported the Scheme and the Company in securing this buy-in. This significant transaction for the Scheme has enabled both the Trustees and Hays – who worked collaboratively throughout the process – to secure attractive terms with PIC. It is another example of how great preparation and collaboration between all parties can get the best outcome for members of the Scheme,” added Kenneth Hardman, Partner at LCP.