UK - Insurance giant Prudential has clinched a £389m bulk annuity deal with trustees at former high street retail giant C&A's pension scheme.
The deal – one of the biggest of its kind ever completed – guarantees the promised benefits under the scheme without increases.
It also leaves the trustees with some of the surplus to fund discretionary increases. Since the C&A scheme was contracted-in, it was not obliged to increase benefits in line with inflation.
Prudential was chosen after almost two years of discussion with the trustees which, it said, were aimed at building up confidence that the fund would be well administered.
Prudential head of bulk annuities Ted Clack said: “Part of what the trustees wanted to know is that we could take over the administration properly and administer both the pensioners and the deferreds.”
It is understood that Legal & General and Standard Life also put in tenders for the bid, although both dropped out later in negotiations.
Industry sources have speculated that the reason may be due to the large amount of regulatory capital needed to fund the deal.
Prudential says the deal is the third largest on record after the Feranti and Dalgety buyouts – each around £500m – in 1999.
Falling sales forced C&A to close its 109 British stores – with a loss of 4800 jobs – in January 2001.
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