Stagecoach Group Pension Scheme to be transferred to Aberdeen

A&O Shearman acted for Stagecoach in an innovative risk transfer transaction, working collaboratively with the Trustees and Aberdeen. After an extensive process of considering endgame options for the Scheme, an agreement was reached whereby the Scheme will continue to “run on” with Aberdeen as the new sponsor.

The arrangement is expected to bring significant benefits to the Scheme’s 22,000 members with an initial uplift to all benefits and better inflation protection out of existing Scheme surplus. The arrangement will also offer the prospect of further pension increases for Scheme members in the future without compromising the long-term security for the Scheme.

Commenting on the transaction, A&O Shearman partner and Head of UK Pensions, Neil Bowden said:

“It has been exciting to work with Stagecoach on a risk transfer transaction which does break new ground – delivering an “exit” for Stagecoach but facilitating a “run on” within the occupational pension scheme framework that both the Trustees and Aberdeen found attractive. The initial uplift to members benefits out of existing surplus is also an interesting feature compared to more traditional insurance transactions when any benefit augmentations can be a number of years later when the final buy-out takes place.”

The A&O Shearman team was led by partner Neil Bowden, senior associate Myles Cormack, associate Lucy Pasi in pensions with support from associate Andrew Pang in corporate and associates Jessica McIntosh and Sarah Ward in employment.