Emap completes buyout of defined contribution pension scheme

Emap has completed the buyout of its defined contribution (DC) pension scheme, which had 6,000 employee members.

The scheme had assets before the transaction of around £140 million. The buyout was completed with assistance from Mercer and Capita Hartshead.

As part of the buyout agreement, and depending on their membership status and level of benefits, the members were provided with a number of different options.

The 750 active members were transferred to Emap’s new group personal pension (GPP) scheme and more than 1,400 members opted to take their benefits as a lump sum. Around 400 took a transfer to a provider of their choice and just under 3,500 had their benefits transferred to a buyout plan with Standard Life.

Rosemary Kennell, chair of trustees at Emap, said: “This is a good outcome for the members in particular, as wind ups can become very drawn out.

“We would not have made the swift progress we did without everyone – the company, Capita Hartshead, that were both the administrators and wind-up specialists, our investment advisers, the insurer, the legal team from Wragges and the trustees – pulling together.”

Akash Rooprai, a principal at Mercer and project manager for the transaction, added: “Organisations that have undergone a restructuring are often left with a DC pension scheme with a smaller number of members.

“Often, it is not cost effective for them to administer the scheme in-house so it makes sense to pass the administrative elements to a specialist provider that has economies of scale. Essentially, this is a transfer of assets or funds, but there are implications so effective management of the process is essential.”

Gary Graham, pensions operations director at Capita Hartshead, added: “People might expect DC scheme wind ups to be straightforward but there were a lot of different elements in this case. For example, policies to secure members’ retirement annuities had been bought in the trustees’ name.

“As a result, we had to trace more than 300 pensioners in order to assign the policies to them. The fact that there were 20 different providers with varying assignment processes added a further layer of complexity.”

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