Independent Trustee Services Limited (ITS), chair of the First Quench Pension Fund, (First Quench formerly operated under the Threshers, Wine Rack, Bottoms up, Haddows and Victoria Wines brands) is pleased to announce that it has agreed a buy-in transaction with Pension Insurance Corporation (PIC). PIC will receive assets amounting to £160 million. The scheme has 1,966 members.
The buy-in follows a negotiated settlement between Richard Fleming and John Milsom of KPMG as the Joint Administrators of First Quench Retailing Limited (FQRL) and the Trustee in relation to certain funds held in escrow. FQRL entered Administration in October 2009 and the Fund has been in PPF assessment since that time.
As a result of the settlement, the Trustee has, following a tendering process, been able to secure a buy-in policy with PIC. The policy guarantees members’ benefits at least equal to 100% of PPF compensation, but it is expected that members will receive a material uplift beyond the PPF level, once the final data and benefit work has been completed.
Chris Martin, Managing Director of Independent Trustee Services Limited, commented, “We are delighted to have completed our settlement discussions and to have achieved what we believe will be a very positive outcome for members. Whilst members will not receive their full Fund benefits, the outcome should mean that overall the Fund can pay materially more than PPF compensation. ITS and its co-trustees have worked closely with their advisers, plus the Joint Administrators, PIC and the PPF to deliver a successful outcome to a very complex situation.”
Commenting on the settlement, Richard Fleming of KPMG said, “This is a pragmatic and fair outcome which allowed creditors of FQRL to achieve a significant return which may otherwise have been eroded in extensive and costly legal disputes between parties.”
Charlie Finch, partner at LCP, who advised the Trustee on the insurance process, said: “The interaction between the buy-in and the settlement of the escrow account added additional complexity to the insurance process. We are very pleased to have been able to use our practical experience of insurer pricing and commercial terms to help the Trustee put in place a buy-in structure that has delivered such a positive outcome for members.”
David Collinson, co-Head of Business Origination at Pension Insurance Corporation, said, “We are proud to have been able to help the Trustee secure members’ benefits for the long-term and bring stability after what must have been a concerning time for the members. I am also delighted we will be able to provide an uplift in members’ benefits over and above what they would have received in the PPF. This has been a complex process and both ITS and LCP have been instrumental in helping achieve the best result for members.”
Martin concluded “We are now working towards delivering certainty to all members in terms of the uplifted benefits they can expect to receive.”
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