Arcadia Group staff rescued in £850m pension bail out

The trustee of the Arcadia Group and Arcadia Group Senior Executive Pension Schemes have agreed an £850 million buy-in with Aviva, securing benefits for 8,800 members.

The fate of Arcadia's pensions, which includes employees of Topshop, Topman, Burton, and Dorothy Perkins, had been in the balance since Sir Philip Green put the group into administration at the end of November 2020 after failing to secure additional funding to keep it afloat.

Deloitte was appointed to conduct the sale of its assets with KPMG appointed to look after the sale of 214 Oxford Street, which eventually went to IKEA. None of the buyers of the brands elected to keep any of Arcadia's circa 450 stores open, leading to thousands of redundancies. The group employed around 13,000 people before its collapse.

Green was in negotiations with The Pensions Regulator for months before Arcadia's collapse, and agreed to inject a substantial sum into the scheme.

Trustees of the pension scheme agreed a deal with Aviva to guarantee its members' incomes. The first part of the deal saw an initial payment of £850m.

Under the buy-in, Aviva will provide members of the Arcadia Group Pension Scheme with the full scheme benefits that they would have been entitled to if the insolvency had not taken place. For the Arcadia Group Senior Executive Pension Scheme, pensions have been secured at the level they would have been in 2022.

Further work is being carried out to determine the future level of pension increases for members of the Arcadia Group senior executives pension scheme. Members will be updated with further information at the earliest opportunity.

Alda Andreotti, Chair of Trustees of the Arcadia Group pension scheme, said: "This is a positive development for members, securing their benefits for the long-term. Members will receive benefits based on their Arcadia Scheme pension, rather than receiving compensation from the PPF.

"This transaction is the result of our commitment to achieving the best outcome for members and I would like to thank all parties who collaborated with us. This includes our professional advisers, the Pensions Regulator and the PPF who have offered their guidance, support and reassuring protection to the schemes during these challenging times.

"The trustees are extremely pleased with this substantial development and we have already updated members directly on what the buy-in means for them. Our hard work will now continue to maximise the benefits for all members and prepare the schemes for buy-out."

Jamie Cole, Head of Bulk Purchase Annuity Origination at Aviva, commented: "We are delighted to be securing the benefits of more than 8,000 members of the two schemes, providing security for members, and we look forward to welcoming them as Aviva customers once the buy-out is complete.

"The trustees’ goal of securing the best outcome for members and strong collaboration between parties helped achieve a smooth transaction."