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Aviva, Phoenix Group assume M&S pension liabilities worth £1.4B

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Aviva, Phoenix Group assume M&S pension liabilities worth £1.4B

The trustee of the Marks and Spencer Pension Scheme completed bulk annuity sales worth approximately £1.40 billion in two tranches, transferring longevity risks associated with pension payouts to Aviva PLC and Phoenix Group Holdings, the U.K.-based insurers said.

Aviva purchased bulk annuities worth £925 million, in what it said was its largest purchase in this category to date. The insurer has expanded its team for the bulk annuities business by more than 30 people over the past six months.

Aviva provides general, health and travel insurance to Marks & Spencer Group PLC's retail customers, it noted. The scheme and Aviva implemented an umbrella agreement that paves the way for further transfers.

Meanwhile, Phoenix Group also signed an umbrella agreement with the pension scheme, while purchasing bulk annuities worth £470 million. The company noted that it was the first external bulk annuity purchase that it has undertaken, having said in 2017 that it was entering the market.

Lane Clark & Peacock was the lead adviser on both deals for the trustee, while Linklaters provided legal advice on the Phoenix transaction.

Phoenix Group was advised by CMS, it said.